The Man Who Bought the World

While the Fund's 2021 -2025 program strategy ostensibly lays out a robust governance and operations framework, Human Rights Watch has found that these institutional safeguards have been easily circumvented by the crown prince. Major PIF investments have involved unilateral decision-making by the crown prince, despite protests from the board of directors and professional advisors. The crown prince has circumvented governance procedures and gone straight to the king when his decisions have been opposed.

For example, in early 2020, Mohammed bin Salman wanted the PIF to buy specific stocks as the markets plummeted during the onset of the global pandemic. The crown prince went against the decision of the PIF board of directors and bypassed the PIF's internal governance and operations framework. In an interview for a documentary on MBC, a Saudi government-backed broadcaster, PIF Governor Yasir al-Rumayyan said that the PIF board of directors voted against the move because it was seen as too risky. According to al-Rumayyan, Mohammed bin Salman "took the matter to the King," who "issued a royal decree allowing us to avoid existing PIF governance rules and follow the opinion of the Chairman (MBS)." Al-Rumayyan added, "the PIF Board could not be persuaded of a specific opinion, so we worked outside the outlines of governance."

The current PIF board of directors has nine members in addition to Crown Prince Mohammed. Seven of the other PIF board members are currently serving as ministers in Saudi Arabia or other high-level government positions and were appointed to these positions by the king. Many, if not all, were appointed to their current positions after King Salman succeeded to the throne and his son assumed increasing power; many are close personal confidants of Mohammed bin Salman, particularly PIF Governor Yasir al-Rumayyan, Minister of State Mohammad al-Sheikh, Minister of Finance Mohammed al-Jadaan, and political advisor Muhammad al-Tuwaijri.

Zero Transparency and Accountability over State Wealth

Mohammed bin Salman, supported by a handful of unaccountable Saudi elite individuals, controls the principal levers of the country's economy and wields these levers at his discretion, using public funds to pursue his interests. The crown prince and a small group of elites use the wealth of Saudi Arabia to benefit themselves at the expense of the public good. Through the PIF, Saudi public resources are effectively controlled by one person, who does not wield this enormous economic authority in the interest of broader public good but instead manages public funds in a way that is largely arbitrary and highly personalized.

Concerns about abusive and unaccountable leaders controlling vast state wealth are further exacerbated when considering the sources of the PIF's recent significant growth. Most of the growth since 2015 has been due to the transfer of other Saudi government assets into the PIF, most notably the transfer of shares of the state-owned fossil fuel company Aramco, along with proceeds from the 2019 Aramco initial public offering, rather than returns from the PIF's investment portfolio.

From December 2017 to the end of June 2023, the transfer of the Aramco shares and "capital injections sourced mainly from the proceeds of the 2019 Aramco initial public offering and the central bank's foreign exchange reserves" accounted for nearly half of the PIF's growth, according to Tim Callen at the Arab Gulf States Institute in Washington.

By transferring valuable government assets into the PIF, Mohammed bin Salman has made vast amounts of capital available for him to pursue his own interests. For example, NEOM Company, wholly owned by the PIF, is developing an economic zone and a new city at an estimated cost of $500 billion. NEOM is one of the Crown Prince's "highest priorities," media have reported, and "the Saudi state is devoting immense resources to making it a reality."

NEOM demonstrates how the crown prince is able to unilaterally direct enormous sums of state wealth to mega-projects that do little to realize economic, social, or cultural rights, despite the country's international obligation to dedicate maximum available resources towards their progressive realization. Early construction for The Line, a futuristic subproject of NEOM, "will require the removal of more than 20 million tons of rock-three times the weight of Hoover Dam," according to Bloomberg. A senior manager at NEOM was "so disturbed by what he saw as financial waste [for the project] that it kept him up at night." Another told the news agency, "We couldn't even estimate the build cost. We were hanging buildings on the side of cliffs, and we didn't even know the geology."

Investigative journalists who wrote a book on the Saudi crown prince described the consequences of his access to financial capital as follows: "Other world leaders controlled more powerful militaries and bigger economies, but [Mohammed bin Salman] had more distilled power than just about anyone on earth and a willingness to follow a gut feeling with action."

Mohammed bin Salman's spending on PIF-funded projects raises questions about the realization of economic, social, and cultural rights in the country, particularly since poverty rates in Saudi Arabia are by some measures high. The Saudi government does not disclose basic data on poverty, does not nationally define poverty, and has not published a poverty line.

In 2023, the United Nations Economic and Social Commission for Western Asia (UNESCWA) released a report on poverty in the Gulf Cooperation Council. Because GCC countries, including Saudi Arabia, publish little or no information on poverty levels, the report estimated poverty lines in the region based on GCC national statistical offices on household income and consumption expenditure, finding that Saudi Arabia has the highest poverty headcount rate for nationals in the GCC at 13.6 percent - meaning that poverty affects nearly "one in seven nationals in Saudi Arabia." This figure does not include all Saudi residents, particularly migrant workers, who make up approximately 42 percent of the population, and undocumented migrants - groups that are economically marginalized and vulnerable to systematic labor abuses - meaning that the actual poverty rate in the country is likely much higher.

These preliminary figures suggest what could be troublingly high rates of poverty and inequality inside Saudi Arabia. There are also no mechanisms through which the Saudi public can exercise control over the country's economic resources, including PIF spending, and demand that more resources be dedicated to poverty alleviation and services which aid the country's most marginalized.

Whitewashing and Greenwashing Saudi Government Abuses Via the PIF

PIF investments in the United States, the UK, and elsewhere in the world also serve a powerful tool for Saudi soft power and influence. These investments are a cornerstone of Saudi Arabia's influence operations abroad, which seek to garner uncritical foreign support for Mohammed bin Salman's agenda, spread disinformation about the country's rights record, neutralize scrutiny, silence critics, and undermine institutions seeking transparency and accountability.

Under the guise of everyday commerce, PIF investments yield influence, support, and silence in some of the world's most politically strategic jurisdictions. The June 2023 framework agreement between the Professional Golfers' Association (PGA) and PIF-funded LIV Golf included a "non-disparagement clause" that prevents the PGA and its officials from criticizing Saudi Arabia's human rights record.

The PIF has tried to subvert oversight of US companies that do business with the PIF. In November 2023, the PIF sued US consulting firms McKinsey, Boston Consulting Group, M Klein and Company, and Teneo in Saudi Administrative Court to prevent the firms from providing information to a US congressional probe investigating Saudi influence in the United States headed by Senator Richard Blumenthal. As Blumenthal said, the lawsuit effectively threatened employees of the US firms with 20 years of imprisonment and a fine of up to 1 million Saudi riyals (nearly $267,000) each if they complied with subpoenas issued by Chairman Blumenthal. The four firms appeared at a February 2024 hearing of the congressional investigation.

To mute criticism and deflect from the country's rights record, PIF investments in foreign jurisdictions provide incentives for silence on Saudi Arabia's poor rights record, proliferate distorted narratives of reform, and build support for Mohammed bin Salman despite his personal responsibility for serious human rights abuses, including the murder of journalist Jamal Khashoggi.

At best, this influence has resulted in institutions and officials failing to acknowledge or speak out about the country's dire human rights record. Moreover, not only have PIF investments garnered support or silence, but they have also undermined the work of foreign oversight bodies seeking transparency and accountability. Accordingly, the PIF has had a corrosive impact on good governance mechanisms abroad.

The PIF plays a double game: court documents show that the PIF has claimed that its investments abroad concern Saudi Arabia's national security interests and fall under sovereign immunity, yet, when politically expedient, the PIF argues that its investments are based solely on sound economic reasoning and are separate from the interests of the Saudi state.

Over the last several years, the Saudi government has used major investments in high-profile sports and entertainment events in an attempt at image rehabilitation to deflect from global perception of the Saudi state as a severe and persistent human rights violator. Finally, Saudi investment through the PIF has also been used to highlight high-profile investments in clean energy technologies. The PIF's investments in clean energy remain a miniscule proportion of those in fossil fuels and amount to little more than greenwashing. At the same time that PIF has made limited investment in clean energy, it has added assets in fossil fuels. The PIF has also served as a tool of distraction from Saudi Arabia's growing contributions to the climate crisis and its role leading efforts to undermine and stymy international agreements and other efforts to meaningfully address the climate crisis.

The PIF is an organ of the Saudi state. It is the state sovereign wealth fund, created by royal decree to administer state assets. It is overseen by the Council of Economic and Development Affairs (CEDA), a government body that oversees the Kingdom's domestic affairs. Its board is appointed by the prime minister-that is, Crown Prince Mohammed. The crown prince chairs the board. As a state entity, the PIF has an obligation to uphold Saudi Arabia's international human rights commitments.

In addition, while governments have the primary responsibility to respect, protect, and fulfill human rights under international law, businesses also have internationally recognized responsibilities regarding human rights, including a responsibility to avoid causing or contributing to human rights abuses.

In line with these responsibilities, businesses should conduct thorough and independent human rights due diligence prior to any engagement with the PIF and should refrain from activities that would bolster the reputation of government entities or officials recently and credibly accused of serious abuses. When serious adverse human rights impacts stemming from engagement with the PIF are unavoidable, businesses should suspend their engagement with the PIF. Businesses engaging with the PIF should not agree to any explicit or implicit contractual terms with the PIF that restrict their ability to speak out in public or in private about abuses by the Saudi government.

Recommendations

To the Government of Saudi Arabia

• Bring the PIF's governance in line with the Santiago Principles, internationally accepted principles and practices for sovereign wealth funds, including by establishing include human rights and anti-corruption protections.

• Institute free speech and responsive governance mechanisms.

• Guarantee the right to freedom of information in Saudi Arabia's Basic Law on Governance.

• Pass and implement a general freedom of information law.

• Collect and publish key poverty figures and indicators, including on migrant workers.

• Investigate allegations that assets seized without due process in 2017 ended up in the PIF.

• Release Essam al-Zamil, an economic researcher and writer, detained in September 2017 and on trial for alleged membership in the Muslim Brotherhood, who had called into question Saudi projections of revenue from the Aramco initial public offering.

• Release members of the Huwaitat tribe who have been detained for peacefully protesting forced evictions during the NEOM megaproject and quash their sentences.

• Quash the death sentences of Ibrahim Saleh Ahmed al-Huwaiti, Ataullah Musa Muhammad al-Huwaiti, and Shadli Ahmed Mahmoud al-Huwaiti, who were sentenced to death for peacefully protesting forced evictions during the NEOM megaproject.

• Halt the PIF-funded Jeddah Central Project and investigate allegations of forced evictions.

• Respect the right of residents in the affected areas of the PIF-funded Jeddah Central Project to peacefully protest.

• Consult with communities that may be impacted by demolitions and provide adequate alternative housing and appropriate compensation if their homes or businesses are removed for the PIF-funded Jeddah Central Project.

• Immediately release all prisoners held solely for peaceful exercise of their rights to free expression and association, including prisoners convicted of alleged crimes, prisoners currently on trial, and prisoners held arbitrarily.

• Investigate allegations of torture and other ill-treatment by an independent body and ensure that perpetrators are held accountable and survivors are provided with redress.

• Allow international monitors to enter the country and grant them unfettered access to detainees.

To the Saudi Public Investment Fund (PIF)

• Publish detailed information on the PIF's Board of Directors and individual directors' relationships with PIF investments and subsidiaries, in line with the Santiago Principles.

• Publish key governance documents of the PIF, including decrees concerning the appointments of members of the Board of Director since 2015.

• Release key internal PIF decision-making documents, including records of meetings, decrees, and other relevant material.

• Release all organizational charts reflecting corporate structure, officers, directors, and employees for the PIF and all the PIF's wholly owned subsidiaries as they are currently formed.

• Develop and implement a freedom of information request process that is consistent with international standards.

• In future contracts, end the use of non-disparagement clauses or other contractual terms that restrict the ability of parties to the contract to speak out in public or in private about human rights abuses, and undertake not to seek enforcement of such clauses in existing contracts.

• Release detailed statements on PIF investments and subsidiaries in foreign markets.

To Businesses Engaging with the Saudi Public Investment Fund (PIF)

• Conduct thorough and independent human rights due diligence prior to engaging in any business activities with PIF and its subsidiaries, in line with the UN Guiding Principles on Business and Human Rights.

• Adopt policies to identify and prevent risk of contributing to human rights harms linked to their business relationship with the PIF.

• Refrain from doing business with the PIF when serious adverse human rights impacts have been identified as unavoidable by due diligence assessments.

• Understand that businesses are considered responsible for abuses through their "business relationships" and that the concept of "business relationship" applies to a relationship between a business and a sovereign wealth fund that has invested in that business.

• Do not engage in business relationships with PIF assets that Saudi Arabia appropriated from its citizens without due process, particularly those seized during the 2017 corruption crackdown. Businesses that are currently engaging with the PIF or those with prior business relationships should ensure that victims of abuses stemming from the relationship, including those who were displaced during PIF-funded projects, have access to remedies.

• Refrain from engaging in greenwashing, whitewashing, or reputation laundering activities with the PIF that bolster the reputation of the Saudi government entities or officials recently and credibly accused of serious abuses.

• Refuse any explicit or implicit contractual terms with the PIF that restrict the ability to speak out in public or in private about abuses, as distinct from standard confidentiality requirements.

• Avoid entering into contracts or other agreements with the PIF or its subsidiaries that include non-disparagement clauses or other restrictions on speaking out about human rights abuses.

• Publicly report on human rights due diligence measures they have undertaken regarding their relationship with the PIF as a matter of transparency and accountability.

To Saudi Arabia's Key State Allies

• Investigate if sovereign wealth funds and the PIF have links to human rights abuses, and if so, consider sanctions of individuals and the PIF itself until these violations are addressed through independent, transparent accountability and compensation mechanisms.

• Impose travel bans and asset freezes on Saudi officials at the highest levels who played a role in the murder of Jamal Khashoggi or committed acts of torture, including senior officials in the PIF.

• Advocate for the release of dissidents and activists detained solely for peaceful criticism of Saudi authorities.

• Support the updating of the Santiago Principles to include human rights and corruption protections.

• States that review foreign state investments should expand the scope of their reviews to include human rights concerns.

To the US Government

• Expand the remit of the Committee on Foreign Investment in the United States (CFIUS) at the Department of Treasury to review foreign investments for human rights concerns.

• Include Saudi Arabia as a country of concern under CFIUS and ensure that CFIUS reviews PIF investments and subsidiaries in the United States.

To the Senate Subcommittee on Investigations

• Investigate Yasir al-Rumayyan's role in the transfer of Sky Prime Aviation and other companies to the PIF.

• Investigate businesses profiting from assets that Saudi Arabia appropriated from its citizens without internationally recognized due process guarantees, with particular attention to those assets seized during the 2017 crackdown.

Methodology

Saudi authorities have not granted Human Rights Watch access to freely conduct in-country research since a research mission to the country in 2006. Human Rights Watch staff have visited Saudi Arabia six times since 2006, but most of these visits remained tightly circumscribed.

The report is based on a review of government statements, Saudi court documents, Saudi laws and government decrees, documents released during court proceedings in Canada and the United States, company records and reports, investigations, and analyses by journalists, financial experts, and academics. It is bolstered by telephone interviews with Saudi activists and dissidents, as well as with journalists, experts, and lawyers with long experience in Saudi Arabia.

The report builds from and makes reference to previous Human Rights Watch reporting on Saudi Arabia, particularly in regards the detention-related abuse that occurred in late 2017 as part of Saudi Arabia's "anti-corruption" purge and the murder of Jamal Khashoggi in late 2018.

To protect those we interviewed from retaliation, we have withheld names or used pseudonyms for interviewees, unless they indicated a willingness to be named. Researchers informed all interviewees of the purpose of the interview and the ways in which the data would be used, and none of the interviewees received financial or other incentives for speaking with Human Rights Watch.

On August 14, 2024 Human Rights Watch sent letters to the following individuals and entitites outlining the general conclusions of our research: Affinity Partners, Alpha Star, Boston Consulting Group, M. Klein and Company, McKinsey & Company Inc., Teneo, and KARV Communications. On August 15, 2024, Human Rights Watch sent letters to the following individuals and entitites outlining the general conclusions of our research: Jeddah Central Development Company, Tabuk Province Governor and Municipality, the Public Investment Fund.On September 4, 2024, Human Rights Watch sent letters to the following individuals and entitites outlining the general conclusions of our research: Al Ahli Saudi Club Company, Al Hilal Saudi Football Club, Al Ittihad Saudi Football Club, Al Nassr Saudi Football Club, Saudi Arabia's Ministry of Energy, Saudi Arabia's Ministry of Environment, Water, and Agriculture, Saudi Arabia's Ministry of Finance, Saudi Arabia's Ministry of Interior, Saudi Arabia's Ministry of Sport, NEOM Company, Qiddiya Investments Company, Red Sea Global, Saudi Aramco, Saudi Arabia's Ministry of Foreign Affairs, Sanabil Investments Company, and Sky Prime Aviation Services. Also on September 4, 2024, Human Rights Watch sent letters to the following individuals outlining the general conclusions of our research: HE Mohammad Abdul Malek al-Sheikh, member of the PIF Board of Directors; HRH Prince Mohammed bin Salman bin Abdulaziz Al Saud, Chairmain of the Public Investment Fund; H. E. Ahmed Aqeel al-Khateeb, member of the PIF Board of Directors; H. E. Mohammad Abdullah al-Jadaan, member of the PIF Board of Directors; H. E. Ibrahim Abdulaziz al-Assaf, member of the PIF Board of Directors; H. E. Khaled al-Tuwaijri, member of the PIF Board of Directors; H. E. Khalid al-Falih, member of the PIF Board of Directors; H. E. Majid al-Qasabi , member of the PIF Board of Directors.

On August 29, 2024, KARV Communications replied to Human Rights Watch. On September 4, 2024, McKinsey & Company Inc and Teneo separately replied to Human Rights Watch. Their comments are reflected below. As of November 11, 2024, the remaining individuals and entities cited above had not yet replied to Human Rights Watch.

Sovereign Wealth Funds and the Public Investment Fund

Sovereign wealth funds (SWFs) are funds accumulated by a government, often comprised of government revenue, trade surpluses, and reserves, that are invested domestically and abroad. The Generally Accepted Principles and Practices (GAPP) for SWFs, now known as the Santiago Principles, define SWFs as funds that are owned by a government, invest in foreign financial assets, and have the purpose of furthering the government's financial objectives. The Santiago Principles are voluntary and were drafted by the International Working Group of SWFs and welcomed by the IMF's International Monetary Financial Committee in 2008. Members of the International Forum of Sovereign Wealth Funds (IFSWF) "agree to endorse and implement the Santiago Principles." Although the Public Investment Fund is not a member of the IFSWF, it has stated it has "fortified its commitment to the Santiago Principles."

Sovereign wealth funds were originally built on oil wealth. A number of SWFs were formed in the 1970s, when major oil-producing countries created "stabilization funds" to manage the economic impacts of dynamic oil markets, a model later emulated in the 1980s by countries with large trade surpluses, such as China and Singapore. As an increasing number of governments created SWFs and SWFs grew in size, experts raised concerns regarding the possible impact of SWFs on global markets, particularly if the state-owned funds were used for political purposes.

Sovereign wealth funds, having amassed great wealth, are now key players in the global capital market. By the end of 2020, SWFs controlled more than US$8 trillion globally. SWFs funded by oil and gas accounted for more than half of total SWF wealth, according to the Peterson Institute for International Economics (PIIE), which assesses SWFs across the globe on transparency, governance, and accountability metrics.

A SWF is generally understood to be an entity that invest state funds for the future benefit of the country, for example by stabilizing government resources against commodity price shocks and by utilizing revenues from fossil fuels and other natural resource exports to promote development and diversify the domestic economy away from oil. Scholars have examined the role of SWFs in centralizing and entrenching the power of authoritarian political regimes. While some SWFs are structurally separate and distinct from a government's chief executive, Saudi Arabia's Public Investment Fund (PIF) and many other SWFs operate with little transparency or apparent protections to ensure government officials do not use the funds to their own ends. Ruling elites in abusive governments have used SWFs to accumulate vast amounts of capital, consolidate power, facilitate abuse, launder their images, and extend their reach abroad. In certain contexts, as in the high-profile scandal involving Malaysia's sovereign wealth fund, those controlling SWFs have clearly used their funds' capital to enrich themselves and to further elite interests rather than for the public good.

This dynamic is exacerbated in countries heavily reliant on oil export revenues. For more than two decades, Human Rights Watch has documented corruption and mismanagement in oil-rich economies and the impact it has on rights. When a government is the direct beneficiary of a centrally controlled major revenue stream and is therefore not reliant on domestic taxation or a diversified economy to function, those who rule the state have unique opportunities for self-enrichment and corruption, particularly if there is no transparency in the management of revenues, with corrosive effects on governance and ultimately, respect for human rights. Instead of bringing prosperity, rule of law, and respect for rights, the existence of a centrally controlled revenue stream - such as oil revenue - can reinforce or exacerbate an undemocratic or otherwise unaccountable ruler's or governing elite's worst tendencies by providing the financial wherewithal to entrench and enrich itself without any corresponding accountability. These problems are clearly present in Saudi Arabia.

Given these well-documented risks, representatives of the International Monetary Fund (IMF), the principal SWFs, and major countries that receive SWF investments developed the Santiago Principles in 2008. Under these principles, SWFs should "invest on the basis of economic and financial risk and return-related considerations" and "have in place a transparent and sound governance structure that provide for adequate operational controls, risk management, and accountability," among other guiding objectives. The principlescall on governments to publicly disclose the "general approach to withdrawals from the SWF and spending on behalf of the government," the "manner in which the SWF's management is operationally independent from the owner," and "relevant financial information." The principles also call on governments to "clearly define" the "accountability framework" for the SWF's operations in relevant law or agreements.

Nonetheless, the principles do not explicitly address the human rights of the people who should ultimately benefit from the wealth the SWF controls. SWFs are government-controlled funds made up of the state's resources that, as with other state resources, should be managed in a way which progressively realizes economic, social, and cultural rights to the maximum of available resources.

The specific human rights obligations of sovereign wealth funds have been addressed by the Committee on Economic, Social and Cultural Rights, the body of independent experts established to monitor the implementation by states of the ICESCR and to provide authoritative interpretation of the specific rights in the covenant, in at least two cases. In the case of Qatar's sovereign wealth fund, the Qatar Investment Authority (QIA), the Committee concluded that the QIA undertakes investment on behalf of Qatar without a "transparent framework for its investment management and decision-making." Importantly, the Committee found that "as a sovereign wealth fund and an institutional investor, [the QIA] is bound by the State party's obligations and a business entity's responsibilities pursuant to the Covenant and the Guiding Principles on Business and Human Rights." The Committee recommended that Qatar ensure that its sovereign wealth fund "observes the Covenant and the Guiding Principles on Business and Human Rights, in particular by integrating human rights due diligence into its investment policy and decision-making, and provides, in a more transparent manner, disclosure of and reporting on its portfolio and non-financial performance, in particular the impact that it has on environmental, social and governance issues in terms of where it makes its investments."

In its review of Norway, the Committee found that the country's sovereign wealth fund, the Government Pension Fund Global, is subject to the same rights obligations as states, including for investments beyond the country's borders. The Committee wrote that it was "concerned about the serious human rights implications of some of the Fund's investment portfolios, which include companies found to be engaged in home demolition, Israeli settlements or other activities in the Occupied Palestinian Territory." The Committee recommended that Norway bring its sovereign wealth fund in line with "its territorial and extraterritorial obligations under the [ICESCR]."

These recommendations demonstrate that SWFs are subject to the same rights obligations as states. Just as governments are obligated to be transparent and accountable to their citizens, as well as respect human rights, SWFs by extension are bound by these same obligations. Governments should accordingly expect to be held accountable for the way their SWF manages assets. At a bare minimum, governments should respect people's right of access to information about SWFs as they should for other government entities and expenditures, including by proactively making key information publicly available.

In 2019, the Peterson Institute for International Economics (PIIE) scoreboard, which is based on publicly available information, evaluated 64 sovereign wealth funds, finding that more than 40 percent did not clearly identify the source of their financing, the guidelines or rules for withdrawals, nor the use of their earnings through withdrawals. As PIIE noted, "this lack of a commitment to report withdrawals suggests considerable discretion for the owners of the funds."

PIIE ranked Saudi Arabia's PIF as among the least transparent and least accountable, and with the least credible governance structures, of the SWFs it evaluated in 2019. It ranked the Saudi PIF 56 out of 64 funds analyzed, placing it just ahead of the Russian Direct Investment Fund, with which the Saudi PIF partners, as well as funds in the UAE, Kiribati, Brunei, Algeria, Libya, and Equatorial Guinea.

The Crown Prince's Consolidation of Power

Political and Security Power

Since the establishment of the modern-day Kingdom of Saudi Arabia in 1932, the country has been ruled as an absolute monarchy, first by its founder Abdulaziz Al Saud and then, following his death, by a succession of his sons. While maintaining absolute power over decision making, Saudi leaders historically exercised power in dialogue with informal yet powerful interest groups that maintained the ability to influence decisions. These groups included the country's conservative Sunni religious establishment of state-affiliated and independent clerics, other members of the royal family, the security services, and influential members of the Saudi business community.

In early 2015 the emergence of Mohammed bin Salman, 30 years old at the time, demolished the status quo. He entered the international arena in January 2015 when his father, Salman bin Abdulaziz, then 80 years old, succeeded to the Saudi throne and immediately appointed him defense minister (Salman's former position). King Salman promoted Mohammed bin Nayef, Mohammed bin Salman's cousin and former interior minister, as deputy crown prince behind Crown Prince Muqrin, who is Mohammed bin Salman's uncle. Within three months, however, King Salman altered the line of succession, sacking Muqrin and elevating Mohammed bin Nayef to crown prince and Mohammed bin Salman to deputy crown prince.

In June 2017, after removing the prosecution service from Mohammed bin Nayef's control, King Salman stripped Mohammed bin Nayef of all his official positions and appointed Mohammed bin Salman crown prince and presumptive future king. Saudi authorities moved to sideline anyone who could stand in the way of Mohammed bin Salman's political ascension. In the summer of 2017, around the time of his promotion to crown prince, authorities purged former security and intelligence officials and quietly reorganized the country's prosecution and security apparatus, the primary tools of Saudi repression, and placed them directly under the royal court's oversight.

With the security apparatus completely under royal court control, the authorities then launched a series of arrest campaigns. From September 2017 they targeted dozens of critics and potential critics, including prominent clerics, public intellectuals, academics, and human rights activists. In November 2017 they arrested leading businesspeople and royal family members accused of corruption, and beginning in May 2018 the authorities cracked down on the country's most prominent women's and human rights advocates, academics, journalists, and other outspoken critics. Some of those targeted included individuals such as Essam al-Zamil, an economist who had called into question Saudi projections of revenue from the Aramco initial public offering. Aramco's oil revenues are a critical source of funds for the PIF's expansion.

Detaining citizens for peaceful criticism of government policies or human rights advocacy is not a new phenomenon in Saudi Arabia, but the sheer number and range of individuals targeted in the post-2017 arrest waves, as well as the introduction of new repressive tactics, was unprecedented. It was not until late 2018, however, following the brutal murder of Saudi journalist and Washington Post columnist and prominent critic of Mohammed bin Salman's crackdowns Jamal Khashoggi at Saudi Arabia's Istanbul consulate, that the repressive side of the crown prince's domestic record began to receive significant international scrutiny. In 2021, a United States intelligence report was released that concluded what many had long suspected: that the crown prince had approved Khashoggi's murder. After the report's release, dozens of human rights organizations called on US President Joe Biden to sanction Saudi officials, including the crown prince.

When confronted in an interview with Bloomberg in October 2018 about Saudi Arabia's mass arrests, before the Khashoggi murder, Mohammed bin Salman justified them as necessary for enacting reforms in Saudi Arabia, stating:

I believe that a lot of movements that happen around the world, they happen with a price. So for example if you look at the United States of America, when for example they wanted to free the slaves. What was the price? Civil war. It divided America for a few years. Thousands, tens of thousands of people died to win the freedom for the slaves…. So if there is a small price in that area, it's better than paying a big debt to do that move…

Mohammed bin Salman's consolidation of power and mass arrests, which he labeled a "small price" in comparison with other "movements around the world," allowed him to propose his own solutions to Saudi Arabia's burgeoning economic crisis without hinderance or obstruction from Saudi Arabia's traditional interest groups.

The PIF has been central to the crown prince's efforts. Crown Prince Mohammed is now the de facto ruler of Saudi Arabia and has control over a nearly trillion-dollar fund that is built on the state's oil wealth. He is investing that wealth aggressively at home and abroad. A German Institute for International and Security Affairs report that analyzed the PIF found that the fund was "institutionally tailored" to the Crown Prince, that the fund will "contribute to a centralization of power in favor of the crown prince," and that the fund will "closely link economic transformation in Saudi Arabia with consolidation of Bin Salman's rule."

Economic Power and PIF Control

The crown prince's consolidation of political and security power occurred alongside efforts to concentrate economic power under his authority, most significantly via the restructuring and growth of the PIF. Centralization of financial power in the hands of Mohammed bin Salman and his close circle of advisors is reflected in the reorganization of the PIF's governance framework and the Fund's investment strategy. This reorganization shows how a handful of Saudi elite individuals, who are centered around Mohammed bin Salman, control the principal levers of the country's economy and wield these levers at their discretion, using state funds to pursue their own interests.

When King Abdullah died in January 2015, the country faced a major economic crisis as global oil prices were plummeting, and the Saudi youth unemployment rate was around 30 percent. Mohammed bin Salman quickly became the face of Saudi Arabia's efforts to counter its economic woes.

After assuming the throne in 2015, King Salman made major changes to government, including replacing several existing council and advisory bodies with two new Saudi Council of Ministers subcommittees. Since his appointment as crown prince in 2017, Mohammed bin Salman has chaired both subcommittees, putting him in charge of both political and security and economic affairs. One of the two core advisory bodies is the Council of Economic and Development Affairs (CEDA), a policy advisory body that oversees the Kingdom's domestic affairs and is responsible for implementing Vision 2030, a sweeping development program aimed at diversifying the economy and creating a "global investment powerhouse." Mohammed bin Salman has been the chairman of CEDA since it was formed. The PIF is responsible for funding and enacting Vision 2030, which commits to "empowering [Saudi] society" and "providing equal opportunities" and "promises to achieve the happiness and fulfillment of citizens and residents."

In March 2015, the PIF was "reborn," according to its website. A Council of Ministers resolution moved the PIF from the oversight of the Ministry of Finance to that of the newly formed CEDA.As explained in a PIF publication, the move meant that the "PIF's Board of Directors was reconstituted with the Chairman of CEDA becoming PIF's Chairman." Since 2015, Mohammed bin Salman has been both the chairman of CEDA and the chairman of the PIF's Board.

While Saudi Arabia's state finances have long been characterized by a lack of transparency and oversight, the restructuring and dramatic expansion of the PIF has consolidated vast economic power within Saudi Arabia under the crown prince alone. Investigative journalists who wrote a book on the Saudi crown prince described the consequences of this access to financial capital as follows: "Other world leaders controlled more powerful militaries and bigger economies, but [Mohammed bin Salman] had more distilled power than just about anyone on earth and a willingness to follow a gut feeling with action."

Academics such as Steffen Hertog argue that, prior to Mohammed bin Salman's rise to power, the Saudi state was "surprisingly fragmented." Several political and economic spheres of influence emerged in parallel overtime, with "some state institutions [doubling] as the private fiefdoms of senior players in the regime." The state evolved as a "hub-and-spoke system centered around the royal family" from which patronage networks originated. Since his rise to power, the crown prince has marginalized these prior nodes of economic power within the ruling family and business elite, centralizing them into his hands and those of a small group of close advisors.

Prior to 2015, the investment strategy of the Saudi state in general, and the PIF in particular, reflected this fragmented structure of the Saudi state. Alexis Montambault-Trudelle, an academic specialized in SWFs, found that "the PIF was subject to distinct and competing political forces which resulted in scattered investment patterns." During this period, multiple ministries and other state agencies had their own foreign investment vehicles, each with their own investment strategy.

Since Mohammed bin Salman took control of the PIF, Saudi government investment decisions have been dominated by the PIF. The post-2015 PIF resulted in "a shift from scattered and uncoordinated investment patterns associated with interagency feuds and the influence of competing senior decision-makers to a personalized and highly interventionist strategy driven by a tightly knit group of regime insiders evolving around the crown prince," according to Montambault-Trudelle.Bloomberg reported in 2022 that the PIF has crowded out both public and private actors within Saudi Arabia and has "increasingly overshadowed former power centers like the finance ministry, economy ministry and central bank to become the country's main growth engine" and "supplant[ed] a pedigreed business class to become one of the most powerful institutions in a fast-changing economy."

The PIF has also come to dominate decision-making regarding how Saudi state wealth is invested abroad. Before 2015, a number of ministries and other State institutions maintained their own funds for foreign investments. Now, the PIF is the kingdom's "sole state investor internationally," according to a report on the PIF by the German Institute for International and Security Affairs. The PIF describes itself as "the Kingdom's main investment arm," with a focus on "achieving attractive financial returns and long-term value for Saudi Arabia." The PIF's profits are meant to serve as the "engine driving the transformation of Saudi Arabia's economy."

The PIF's primary sources of funding include capital injections from the government to the PIF, the transfer of government assets to the PIF, loan and debt instruments, and earnings from its investments.Since 2017, according to Bloomberg, when Mohammed bin Salman rose to the position of crown prince, "the PIF has doubled in size, partly because of transfers from the central bank and the IPO of a stake in state oil giant Aramco." This analysis is echoed by Tim Callen, a former International Monetary Fund (IMF) assistant director, who found that "a significant part of the PIF's growth has come from asset transfers and capital injections from the government and central bank." From December 2017 to the end of June 2023, 32 percent of the PIF's growth came from Mohammed bin Salman's transfer of Aramco shares to the PIF, 17 percent from "capital injections sourced mainly from the proceeds of the 2019 Aramco initial public offering and the central bank's foreign exchange reserves," 31 percent from returns on the PIF's investment portfolio, 5 percent from borrowing, and "the remaining 15% unexplained," according to Callen.

In February 2022, the Crown Prince announced the first of two 4-percent transfers of Aramco shares to the PIF. According to a statement from the Saudi Press Agency announcing the first transfer, "the transfer supports the PIF's plans to grow its Assets under Management to around SAR 4 trillion [US$ 1.066 trillion] by the end of 2025." In April 2023, the Saudi Press Agency announced a second transfer of 4 percent of Aramco's state-owned shares, nearly US$80 billion, to Sanabil Investments, a wholly owned company of the PIF, thus solidifying the "PIF's strong financial position and credit rating." Mohammed bin Salman indicated that "the transfer of part of the State's shares in Saudi Aramco is a continuation of Saudi Arabia's long-term initiatives to boost and diversify the national economy and expand investment opportunities in line with Saudi Vision 2030." In March 2024, the PIF announced another transfer of 8 percent of Aramco shares to the PIF's fully owned companies. The March 2024 transfer brought the PIF's stake in Aramco up to 16 percent, while the Saudi government remains the company's largest shareholder, with 82.18 percent of shares. Saudi Arabia's Tadawul stock market trades the remaining 1.73 percent of Aramco shares.

The PIF has, in a very short period, amassed approximately US$925 billion, becoming one of the largest SWFs in the world. Since 2015, Saudi Crown Prince Mohammed bin Salman has transformed the PIF from a relatively obscure and conservative investment vehicle to one of the largest and most aggressive SWFs in the world. The Crown Prince announced the country's signature economic reform plan, Vision 2030, in 2016, a sweeping development program aimed at diversifying the economy. The PIF is the central engine fueling Vision 2030. Vision 2030 foresees the PIF "becom[ing] the largest sovereign wealth fund in the world." The crown prince has repeatedly claimed the PIF will become the largest SWF in the world by 2030, aiming to balloon the fund to control more than $2 trillion in assets.

The PIF, with Mohammed bin Salman at its helm, has been actively working to increase its international investments. In 2016, the Crown Prince said, "There will not be any investment or development in any region of the world without the Saudi sovereign wealth fund having a say." By 2021, the PIF "succeeded in solidifying its position globally," by increasing the volume of international investments to 30 percent of its assets under management, compared to 5 percent in 2017.The PIF claims it has recently become "one of the world's largest investors." The PIF has investments in North America, Europe, Asia, Latin America, Africa and in the Middle East and North Africa region. In its most recent strategic plan, the PIF describes itself as "a pivotal factor in achieving the Kingdom's Vision 2030," and working to "push the Kingdom to lead the world economically." According to the PIF, the Saudi fund has impact "well beyond Saudi borders."

The PIF has invested significantly, including in the US and Russia. After President Trump's high-profile visit to Riyadh in May 2017, where he was flanked by wealthy American businessmen, the PIF and Blackstone announced a new investment fund, anchored by $20 billion from the PIF, that would "invest in more than $100 billion of infrastructure projects, principally in the United States." An article by Vox reports that the PIF is spending "$45 billion to back startups globally through the SoftBank Vision Fund." While the Vision Fund invests internationally, according to reporting by Vox the dependence of the startup and venture capital (VC) market on Saudi capital is said to be so great that Saudi Arabia "could dry up the flow of money in Silicon Valley" and "cause a global VC crash." In 2021, according to Bloomberg, the PIF had "more than quadruple[d] its exposure to U.S. equities after taking an increasingly prominent role in global markets." By early 2022, the value of disclosed PIF-held US-listed stocks was $56 billion.

The post-2015 PIF has made headline-grabbing investments across the global economy, from sports, technology, finance, and critical minerals. In 2023, Global SWF, a SWF consultancy and tracker, ranked the PIF as the world's "lead investor," spending US$31.6 billion, more than any other SWF. The rise in both size and spending of the PIF has been significant and rapid: in 2021, the PIF did not rank even rank in Global SWF's top ten spenders, and in just nine years, the PIF has grown from $84 billion in 2014 to approximately $925 billion in mid-2024.

The Crown Prince Exercises Significant Control Over the Public Investment Fund

Governance Restructuring and Power Consolidation

The 2015 overhaul of the PIF ultimately concentrated an immense degree of control and oversight into the hands of Mohammed bin Salman, such that a Saudi analyst described the PIF as a "one-man investment vehicle." Robert Mogielnicki, resident scholar at the Arab Gulf States Institute think tank, told the Wall Street Journal that there are few "if any, institutional safeguards to absolutely prevent" top-down interference with established investment procedures.

According to the PIF's own website, the decision to move the PIF under the Council of Economic and Development Affairs (CEDA) "with the Crown Prince HRH Mohammed bin Salman bin Abdulaziz as chairman" was a "major step" that gave the PIF "greater autonomy" and "better-defined national strategic responsibilities."In fact, the PIF's website states that PIF reports to CEDA, chaired by the crown prince, and that the PIF Board of Directors, also chaired by the crown prince, supervises the day-to-day work of the PIF. A document on the PIF's website states that, "Under the chairmanship and guidance of HRH Prince Mohammad bin Salman bin Abdulaziz Al Saud, CEDA's Chairman, the Board is responsible for overseeing PIF's long-term strategy, investment policy and performance." That is, far from operating as an autonomous or independent entity, the PIF is under the close control of the crown prince.

Article 5 of Decree 270 provides that the members of the PIF's board of directors "shall be nominated by an order from the Prime Minister." King Salman served as prime minister from January 2015 until September 27, 2022, when Mohammed bin Salman was promoted to the role in a cabinet shuffle ordered by the king. As prime minister, Mohammed bin Salman also serves as the chairman of the Council of Ministers. Article 4 of Royal Decree No. M/24, the decree which established the PIF in 1971, set out the composition of the PIF board of directors. Between 1971 and 2015, the PIF board of directors consisted of only five members: the finance minister, who also served as chairman, two members of the Council of Ministers nominated by the prime minister, the head of the Central Planning Authority, and the governor of the Saudi Arabian Monetary Agency. In the 1971 decree establishing the PIF, article 4 allowed for the prime minister to nominate only two members to the Board of Directors from the Council of Ministers, whereas the post-2015 PIF allows the prime minister to unilaterally nominate all members of the board. Article 5 of the Public Investment Fund Law of 2019 states that board "membership shall include the Governor, as well as a minimum of four experts and specialists, provided they, include representatives from relevant agencies."

In addition to the crown prince, the current PIF board of directors has nine other members. Seven of the other PIF board members are currently serving as ministers in Saudi Arabia or other high-level government positions and were appointed to these positions by the king. Many, if not all, were appointed to their current positions after King Salman rose to the throne and his son assumed increasing responsibility. Six of the nine PIF board members also appear to sit on CEDA, the body which oversees the PIF. Three members of the PIF board also sit on the board of the state-owned oil company Saudi Aramco, which provides the PIF a significant source of its funding. One has sat on Saudi Aramco's board for many years; the other two were appointed to the Saudi Aramco board after Mohammed bin Salman became crown prince.

A number of board members - PIF Governor Yasir al-Rumayyan and Minister of State Mohammad al-Sheikh in particular - are close personal confidants and advisors to Mohammed bin Salman and were elevated to positions of prominence in the Saudi government only after Mohammed bin Salman became crown prince. Mohammed al-Jadaan and Muhammad al-Tuwaijri were also "substantially elevated by MBS," according to Christopher Davidson in a book about the crown prince's statecraft, and they have often been described as "MBS's closest allies." Other members also serve on the boards of PIF's major investment projects. Tourism Minister Ahmed Aqeel al Khateeb, for example, serves as the chairman of Saudi Arabia Military Industries (SAMI), vice chairman and secretary general of the Jeddah Central Development Company, as well as a member of the boards of both NEOM and the Red Sea Development Company - all of which are wholly owned by the PIF.

The German Institute for International and Security Affairs report concluded that the appointment of all members of the PIF board of directors "is not due to their government positions, but rather to their personal proximity to the crown prince." Academic Montambault-Trudelle as well concludes that the "network of insiders forming the board of directors mirror the concentration of authority around MBS."

Others that have investigated and studied the PIF have concluded the crown prince exercises significant control. A 2022 New York Times report details how the PIF Board approved a $2 billion investment in a private equity fund run by Jared Kushner, former US President Donald J. Trump's son-in-law and former senior advisor. The report concluded that "Prince Mohammed took control of the fund when he rose to power in 2015 and he is its paramount decision maker." The 2019 German Institute for International and Security Affairs report concluded that the crown prince, within the board of directors and through his role as chairman of committees that are responsible for filling important management positions "exerts massive influence on the day-to-day business of the PIF."

The overlapping appointments of PIF board members to other prominent state and ostensibly private institutions raises serious concerns about conflicts between these individuals' public responsibilities and personal interest, particularly in a political environment without any meaningful avenues available to the public to seek redress for failed policies, mismanagement, and corruption. The PIF claims to have "financial and administrative independence." Under the law and in practice, however, Mohammed bin Salman, supported by the PIF's nine-member board, effectively controls these vast resources in Saudi Arabia.

Mohammed bin Salman's PIF -backed Vision 2030 promises to "immediately adopt wide-ranging transparency and accountability reforms" and "hold [government agencies] accountable for any shortcomings." It promises to "adopt leading international standards and administrative practices" in order to "reach the highest levels of transparency and governance in all sectors" while pledging to "set and uphold high standards of accountability." Vision 2030 further commits to "empowering our society" and "providing equal opportunities." It will "improve the quality of [government services] and to meet the needs of every citizen" and commits "to give everyone the opportunity to have their say so that the government can serve them better and meet their aspirations." The Public Investment Fund is "a catalyst for Vision 2030" and "plays a pivotal role" to "achieve its objectives."

Governments have an internationally recognized obligation to progressively realize economic, social and cultural rights using the maximum of available resources. By extension, the Saudi government's control and use of resources should be invested to realize the rights of the Saudi public. Under Mohammed bin Salman, Saudi authorities are fundamentally unaccountable to the Saudi public and are ultimately failing to control and invest resources for the benefit of the public. The PIF, as an organ of the Saudi government and under its control, is subject to the same international rights obligations as the government.

Despite these obligations, Mohammed bin Salman, alongside a small group of his allies, controls Saudi Arabia's wealth in a political context fundamentally lacking transparency and accountability. The members of his close circle, many of whom form the PIF's board of directors, are wholly unaccountable to the public. This handful of unaccountable Saudi elite individuals have uncontested control over state resources, without public oversight, transparency nor accountability, raising concerns over whether these funds are invested and managed in the public interest.

Unilateral Decision-Making

While some of the PIF's investments appear to have reflected "economic and financial risk and return-related considerations," one of the guiding objectives set forth in the Santiago Principles, other PIF investments appear to have involved unilateral and questionable decision-making by the crown prince. Saudi state resources are effectively controlled by one person who does not wield this enormous economic authority in the interest of broader public good, despite Vision 2030's stated commitments, but instead manages these resources in a way that is largely arbitrary, untransparent, and unaccountable.

The PIF's 2021 -2025 program strategy ostensibly lays out a robust governance and operations framework. According to the strategy, the PIF's governance and operating model "builds on global best practices" and "ensures transparency." The Investment Committee of the Board of Directors "reviews and endorses PIF's investment activities." There are five committees at the management level that "review strategic and operation activities and evaluate investment and non-investment proposals before filing them to the Board." However, recent media reports of actions by the PIF suggest that these institutional safeguards can be circumvented by the crown prince.

In 2022, for example, the New York Times reported that "six months after leaving the White House," Jared Kushner secured a $2 billion investment from the PIF in his newly formed private equity firm, "despite objections from the fund's advisers about the merits of the deal. The Times examined internal fund records and correspondence, finding that a PIF-panel tasked with screening investments had serious concerns regarding the proposed investment. Meeting minutes showed that all four panel members at a meeting were not in favor of the project. But, days later, the PIF's board, led by the crown prince, "overruled the panel."

In response to questions from the board, a letter from PIF staff said the PIF could not reduce the size of the investment, which "aim[ed] to form a strategic relationship with the Affinity Partners Fund and its founder, Jared Kushner," and that a reduction might "negatively or fundamentally affect the framework of the agreed strategic and commercial relationship." Ethics experts who spoke with the Times said the deal created the "appearance of potential payback for Mr. Kushner's actions in the White House - or of a bid for future favor if Mr. Trump seeks and wins another presidential term in 2024."

In another instance, Mohammed bin Salman wanted the PIF to buy stocks in early 2020 as the markets plummeted during the onset of the global pandemic, according to PIF Governor Yasir al-Rumayyan. The Wall Street Journal reported that the crown prince "personally picked many of the stocks the fund bought, fast-tracking the purchases through an ad hoc committee that bypassed normal decision-making channels." In an interview for a documentary on MBC, al-Rumayyan said that the PIF Board of Directors voted against the move because it was seen as too risky. According to al-Rumayyan, Mohammed bin Salman "took the matter to the King," who "issued a royal decree allowing us to avoid existing PIF governance rules and follow the opinion of the Chairman (MBS)." "The PIF Board could not be persuaded of a specific opinion, so we worked outside the outlines of governance," he continued.

It also appears that Yasir al-Rumayyan, who is the PIF's governor, acts on behalf of Mohammed bin Salman when making PIF investments, sits on the PIF board, and is the chairman of Newcastle United as well as LIV Golf. He was appointed to the Saudi Aramco board in 2016. Al-Rumayyan has been described as "one of the crown prince's closest personal confidants" by a German Institute for International and Security Affairs report. He has been dispatched by the crown prince to unilaterally broker PIF deals on his behalf, according to the German Institute, including what they state is beyond what is permitted under PIF's internal investment procedures and reviews.

In 2017 and 2018, the PIF expressed interest in investing in the automotive company Tesla. In court documents filed in a US district court and reviewed by Human Rights Watch, when CEO Elon Musk asked al-Rumayyan "whether there were other decision-makers who would need to be involved, Mr. Al-Rumayyan said 'no' and stated that he was the decision maker." According to Musk, in a 2018 meeting with representatives of the PIF, including al-Rumayyan, the PIF informed Musk that they had taken a five percent stake in Tesla "based on a verbal discussion and a verbal agreement and no discussion of price." "So what that meant was that you could trust their word. And so - and no - no written agreement was necessary, and no discussion of price was necessary," Musk continued. The filings come from a lawsuit against Musk filed by a Tesla investor in 2021 who claimed Musk violated the Securities Exchange Act by making false representations in tweets about taking Tesla from a public to a private company and exposed the company to potential liability and market losses. In February 2023, a jury decided that Musk was not liable for losses suffered by investors.

In 2018, the Wall Street Journal reported that at least four senior Western executives who were brought on to lead various aspects of the PIF's investments strategy quickly departed after they realized the dominant role of the crown prince in the Fund. Eric Ebermeyer left his role as head of strategy "within weeks" after "deciding that he would have little say over strategy at a fund dominated by Crown Prince Mohammed bin Salman." Other senior staffers left because of Mohammed bin Salman's micromanagement, according to the Wall Street Journal, and noted that "ideas and deals are driven from the top down."

The PIF Is Linked with Human Rights Abuses

The PIF Has Benefitted from and Facilitated Rights Abuses

The PIF, during the time it has been under the direction of Crown Prince Mohammed bin Salman, has benefitted from human rights abuses directly linked to the crown prince, including the government's 2017 "anti-corruption" crackdown that involved arbitrary detention, ill-treatment, and extortion. Companies owned and controlled by the PIF have also facilitated human rights abuses, including the 2018 murder of Saudi journalist and prominent critic Jamal Khashoggi. According to one analysis, 15 percent of the PIF's growth between the end of December 2017 and the end of June 2023 is unexplained. It is unclear whether some of this 15 percent includes assets apparently seized summarily.

Saudi Government's Arbitrary Detentions, Mistreatment, and Coerced Transfers of Assets

Human Rights Watch obtained and reviewed Saudi government documents showing that members of the PIF board ordered assets seized, apparently summarily, during Mohammed bin Salman's "anti-corruption" campaign, and transferred to companies owned by the PIF.

On November 4, 2017, Saudi Arabian authorities carried out mass arrests, rounding up people and coercing them to hand over money, land, and other assets, including shares in their companies. That same day, King Salman issued Royal Decree No.38/A, which created an anti-corruption committee chaired and led by Crown Prince Mohammed.

Between November 2017 and February 2018, Saudi Arabia detained prominent Saudi businessmen, royal family members, and current and former government officials at Riyadh's five-star Ritz Carlton Hotel. During their time in detention, Saudi authorities used physical abuse to coerce them to hand over assets, the New York Times reported on the basis of extensive interviews with Saudi officials, members of the royal family, and relatives, advisers, and associates of the detainees. At least 17 detainees required hospitalization, and one later died in custody. Saudi Arabia denied accusations of physical abuse as "absolutely untrue."

The crackdown, which the Saudi government claimed was carried out to fight corruption, consolidated wealth and power in the hands of the crown prince.

By transferring part of their assets to the Saudi government, those detained were able to "buy" their freedom. According to media reporting and sources that spoke with Human Rights Watch, many of those detained, at risk of abuse, and some who were abused by Saudi authorities eventually agreed to hand over significant assets to the Saudi government.

Saudi officials have used allegations of corruption to justify other arrests, including a mass arrest of 298 government employees in February 2020, unrelated to the PIF. As with the Ritz-Carlton detentions, these mass arrests raised significant human rights concerns.

Saudi Arabia's ruling elite has long engaged in overt nepotism, and corruption is believed to be rife. At the Ritz, however, Saudi authorities did not seem to have a pre-existing understanding of what people's assets were, in particular of their assets held abroad, and which of these assets were acquired through legitimate means and which through corruption, an informed source with close ties to six men held at the Ritz-Carlton between November 2017 and January 2018 told Human Rights Watch. The source said that negotiations were "purely arbitrary"; Saudi officials approached those detained at the Ritz and asked them to write down their assets and "then the negotiation starts." In some cases, authorities approached people with wildly inflated estimates of their wealth, the source said. He said that authorities extorted financial settlements from detainees through physical coercion as well as freezing their bank accounts and banning their relatives from travel abroad. Some detainees were forced to transfer money held in bank accounts abroad into the country, others to sign statements pledging to pay specified sums, and others had their Saudi bank accounts "zeroed out" in a day. "There was no due process," he said. "It basically went: 'We are going to take everything and then figure it out later.' It wasn't due process."

On November 4, 2017, King Salman issued a royal order forming the Supreme Anti-Corruption Committee and providing "a clear legal mandate" for the investigations into corrupt practices. Saudi Arabia's attorney general said in a statement that "the potential scale of corrupt practices which have been uncovered is very large" and "that at least $100 billion USD has been misused through systematic corruption and embezzlement over several decades." On December 5, 2017, Saudi Arabia's attorney general said that the public prosecution office would investigation the crimes "in coordination with investigation procedures set forth in the Law of Criminal Procedures" which "guarantees defendant's rights." The statement also said that the corruption committee had "followed internationally applied procedures."

However, Human Rights Watch found that detainees were held without trial or charge for over 16 months and without a clear legal basis. Human Rights Watch has repeatedly documented rampant abuses in Saudi Arabia's criminal justice system, including long periods of detention without charge or trial, denial of legal assistance, and the courts' reliance on torture-tainted confessions as the sole basis of conviction. Such systemic violations of defendants' rights are not consistent with basic principles of the rule of law and international human rights standards.

Bank statements of two of the men detained during the crackdown obtained and examined by Human Rights Watch show activity that suggests forced asset transfers. One set of bank statements covers more than a decade of transactions made by an account holder, a former deputy minister under Crown Prince Mohammed bin Nayef who was detained in late 2017.The bank statements show a series of large and unusual transfers to and from the account, including to companies now owned by a PIF subsidiary. Most notably, the bank statements show transfers of more than $240 million into the Saudi Ministry of Finance during or shortly after the account holder was detained. The account holder was released from the Ritz in late January 2018 but disappeared again in May 2022. His whereabouts remain unknown.

Saudi officials have acknowledged that those detained turned over assets in exchange for their freedom. The Financial Times reported that the Saudi government was demanding up to 70 percent of some individuals' wealth for their release from detention. In January 2019, Saudi Arabia's official Saudi Press Agency released a royal court statement saying that the anti-corruption committee had "concluded its tasks" after summoning 381 people to give evidence. The statement claimed that "more than SR400 billion (US$107 billion) was retrieved to the state treasury in the form of real estate, companies, cash, and other assets." The king "expressed his appreciation to HRH the Crown Prince [the chair of the anti-corruption committee], the members of the committee, and their staff for their efforts."

In 2019, the Saudi finance minister, who also sits on the PIF and Saudi Aramco boards, said that the PIF had no role in managing assets seized through settlements during the Ritz crackdown. But at least some of the assets seized during the crackdown ended up in a holding company wholly owned by the PIF.

In addition to the crown prince, two other current PIF board members played a role in ensuring that some of the assets seized during the crackdown were ultimately transferred to the PIF, at least one other PIF board member, Mohammed Al Sheikh, worked with corruption committee a committee created by King Salman in early November 2017 to oversee the corruption crackdown. Another PIF board member, Yassir al-Rumayyan, implemented orders to transfer companies seized during the crackdown to PIF ownership.

Al Sheikh, a minister focusing on economic issues, sits on CEDA and is a member of the PIF board. The Financial Times reported that "many consider [Al Sheikh] to be Prince Mohammed's chief economic adviser." An official letter, signed by Al Sheikh and obtained by Human Rights Watch states that the Crown Prince named him "General Supervisor of the Work of Teams and Units" under the corruption committee and delegated him "full powers" to execute some of the corruption committee's work." Al Sheikh played a central role in settlement negotiations at the Ritz, an investigation by DAWN, a human rights organization focused on the Middle East, found.

On December 22 and 24, 2017, Al Sheikh wrote two letters, both on official Saudi letterhead, to al-Rumayyan, ordering the transfer of 20 companies to the PIF. Human Rights Watch examined both letters, which were submitted during ongoing court proceedings. According to the first letter, dated December 22, 2017, the corruption committee had previous discussions with the PIF's "representatives regarding the transfer of ownership of a number of companies to the Fund's ownership." The letter was following up on these conversations, urging rapid completion of the transfer, and seeking a response "right away" that explained why the transfers had not yet been completed. The Crown Prince, Al Sheikh wrote, should be "kept abreast of what's being done."

Human Rights Watch wrote to Mohammed Al Sheikh on September 4, 2024, to request comment but no response was received by the time of publication. In a 2018 interview with CBS, Mohammed Al Sheikh said that Saudi Arabia "has a serious problem with corruption." He added that, "we were worried that if we started processing people one at a time, that some of the money might be siphoned out of the kingdom, that it would have a severe negative impact on the country and the economy. We had to do what we did at The Ritz."

The next day, on December 23, 2017, according to Al Sheikh, al-Rumayyan sent Al Sheikh a letter communicating that a note had been submitted to the PIF's board of directors recommending that it approve the transfer of the noted companies "by establishing a joint stock company wholly owned by the Fund to which the ownership" of the companies should be transferred. On December 24, 2017, two days after his first letter, Al Sheikh again wrote, asking the PIF governor to report "very urgently" on why the previously requested companies had not yet been transferred to the PIF. He explicitly stated that the crown prince ordered the transfer of these companies to the PIF. On December 26, 2017, al-Rumayyan acknowledged the order and ordered a subordinate, on PIF letterhead, to put it into effect "as fast as possible." A week later, the PIF founded a holding company, Tahakom Investments Company, that ended up owning companies seized during the crackdown.

In early 2018, the PIF founded Tahakom Investments Company, according to a report by Deloitte introduced in court proceedings. Tahakom is a wholly owned subsidiary of the PIF. Human Rights Watch examined Tahakom's articles of incorporation, which describe Tahakom as a "closed stock sole corporation wholly owned by the Public Investment Fund." Ownership ofcompanies some of whose shareholders had been recently arbitrarily detained and abused were transferred to the PIF-owned Tahakom.

Al Sheikh's December 22 letter listed 20 companies each with a full name and commercial register number. The vast majority (or all) of the 20 listed companies were front companies set up by Mohammed bin Nayef when he was Minister of Interior, starting in the mid-2000s, to enable the Saudi government to carry out domestic and regional counterterrorism work, often with partners like the United States, while shielding the Saudi government's identity. In June 2017, Saudi authorities subjected Mohammed bin Nayef to house arrest and a travel ban. In March 2020, Saudi authorities detained and held him incommunicado. In order to create distance between the Saudi state and the companies, Mohammed bin Nayef had private citizens serve as nominal shareholders that, under nominee agreements, would receive compensation for serving in the role and for following Mohammed bin Nayef's orders. Two of these nominal shareholders were Majed Almuzaini and his friend, Abdullah Alsowailem. Salem Almuzaini, Majed's brother, was CEO of both Alpha Start and Sky Prime.

Human Rights Watch examined documents showing that Salem Almuzaini was coerced to transfer his ownership of Alpha Star company to the PIF owned-company Tahakom after allegedly being arbitrarily detained and tortured from September 2017 until his release in January 2018. Almuzaini was re-arrested in August 2020 and his whereabouts remain unknown. In May 2022, the Working Group on Arbitrary Detention (WGAD) found the detention of Salem Almuzaini arbitrary. The WGAD noted that the government of Saudi Arabia said that the allegations concerning Almuzaini were inaccurate but did not specifically address any details of his 2017 detention and alleged torture. An informed source told Human Rights Watch that another company jointly owned by a family member was transferred to the PIF without its owners' approval. HRW reviewed documents showing the transfer of funds that were unsigned by the companies' owners but nonetheless approved by a government notary. The transfer to the PIF was carried out. One of the owners was also detained at the Ritz Carlton.

The Saudi government documents cited above were submitted as part of ongoing legal proceedings in Canada. In early 2021, the PIF-owned Tahakom-held companies filed civil suit against former Saudi intelligence officer Saad al-Jabri, who had been intimately involved in setting up these companies, and its counterterrorism operations, in Canadian court, alleging that he had embezzled billions from the companies. In January 2024, Al-Jabri brought a counterclaim against al-Rumayyan claiming that al-Rumayyan carried out the instructions" of Mohammed Bin Salman with the intent of "harming, silencing and ultimately destroying" Al-Jabri's family. Al-Jabri, who also filed suit against the crown prince in the US, alleges that the crown prince planned to have him assassinated in October 2018. The Canadian civil case remains ongoing at the time of publication. The Saudi government has not publicly commented on the allegations detailed above regarding Salem Almuzaini's alleged torture and arbitrary detention, and the coerced transfer of assets during the 2017 corruption crackdown. In March 2020, two of Al-Jabri's children, Sarah and Omar, were detained in Saudi Arabia in circumstances that the UN Working Group on Arbitrary Detention found to be arbitrary and that Human Rights Watch determined amounted to collective punishment.

PIF-Owned Assets Facilitate Murder

In October 2018, less than a year after Sky Prime's transfer to the PIF, Sky Prime airplanes were used to fly the kill team that murdered Jamal Khashoggi. Saudi agents used two Sky Prime airplanes to travel to Istanbul, murder Khashoggi in the country's consulate, and return to Saudi Arabia.

A June 2019 UN report by the special rapporteur on extrajudicial killings confirmed that the planes were owned by Sky Prime Aviation. The special rapporteur's findings were based on official flight records from the European Organization for the Safety of Air Navigation. One Sky Prime private plane (HZ-SK2) flew from Riyadh to Istanbul on the morning of October 2, 2018, with nine of the fifteen Saudi agents that were involved in Khashoggi's murder. According to official flight records, the flight plan for plane HZ-SK2 was filed at 19:30 UTC. However, at 20:19 UTC, it was cancelled and re-filed at 20:23 UTC with a diplomatic clearance. A diplomatic clearance is a special authorization that is required, according to European legislation, for military and other state aircrafts to land within or fly over national borders. According to Turkish regulation, requests for diplomatic clearance are submitted to the Ministry of Foreign Affairs "through diplomatic means" and at least ten business days prior to the flight planned.

According to the UN special rapporteur, one of the men onboard the planes was the forensic medic who used a saw to dismember Khashoggi. As stated by the UN special rapporteur: "There is little plausible explanation for his role, other than the role he filled - dismembering and disposing of the body." The eight other officials aboard the Sky Prime plane were members of the Royal Guard and other high-ranking intelligence officers. Two Sky Prime planes (HZ-SK1 and HZ-SK2) transported thirteen of the fifteen Saudi agents involved in the killing back to Riyadh, one flying through Cairo, the other flying through Dubai.

An informed source said that while still operating as Ministry of Interior front companies, the aviation companies had been used to transport weapons, intelligence personnel, and prisoners. But, by October 2018, these companies were no longer Ministry of Interior front companies, but rather part of an ever-growing and ever-varied list of holdings wholly owned by the Saudi sovereign wealth fund.

A few months after the murder of Khashoggi, in December 2018, the recently appointed CEO of Sky Prime told the press that the owner of the aviation companies, the PIF, had decided to separate Sky Prime and Alpha Starr.

Rights Abuses Linked to PIF Projects

Rights violations have also been linked to some of the PIF's most high-profile megaprojects. The sheer scale of these ventures, their labor intensity, and their importance to the crown prince, combined with the lack of protection for workers and impacted communities and respect for basic rights, make these megaprojects particularly prone to abuse. Saudi Arabia's most marginalized people - migrant workers, rural communities, poor and working-class residents - have borne the brunt of abuses stemming from the crown prince's most abusive projects, backed by significant levels of capital from the PIF. The PIF is being used to forcibly evict residents, raze neighborhoods, subject workers to terrible abuses, and silence communities.

Arbitrary Arrests, Extrajudicial Killing Related to NEOM

Saudi human rights organizations, journalist investigations, and the UN have documented serious abuses linked to the construction of NEOM, the set of construction projects that includes The Line being built in the country's northwest near Tabuk. Saudi authorities have carried out abuses against the local Huwaitat tribe.

Although promotional videos of NEOM claimed that the city would be built on "virgin land," the Huwaitat had roamed the area as pastoralists for centuries, and more recently settled in the area. According to ALQST, a Saudi human rights organization based in the UK, Saudi authorities In January 2020 informed residents of al-Khuraiba, Sharma, and Gayal, villages in the planned NEOM area, that they were to be evicted in service of the NEOM project. Residents immediately expressed their opposition to the plan, including by drafting a petition against the eviction that was signed by 174 members of the tribe, a copy of which was obtained by ALQST.

Also in early 2020, a local activist, Abdulrahim al-Huwaiti, began to protest, recording videos that went viral, accusing the government of pressuring residents of the area to sign over their homes and announcing that security forces were trying to evict him and other members of the Huwaitat tribe. On April 12, Saudi authorities arrived at al-Huwaiti's home to measure his land without his consent; he posted a video on social media that day documenting the forced eviction. The next day, Saudi security forces killed al-Huwaiti, according to his relatives and neighbors. Video footage shows al-Huwaiti's house riddled with bullets. Saudi authorities later issued a statement stating that al-Huwaiti died "after he barricaded himself in his home" after authorities "deal[t] with him to neutralize his danger." Since the killing, three of Abdulrahim al-Huwaiti's brothers have been arrested and held in prison, according to Alya al-Huwaiti, a London-based activist and spokesperson of the tribe.

According to ALQST, Saudi authorities have arrested and detained at least 47 members of the Huwaitat tribe "for speaking out against or peacefully resisting illegal evictions associated with the NEOM project." In August 2022, the Specialized Criminal Court of Appeal "sentenced both Abdulilah Rashid Ibrahim al-Huwaiti and Abdullah Dakhil Allah al-Huwaiti to 50 years in prison, followed by a 50-year travel ban, for supporting their family's refusal to be forcibly evicted from their homes to make way for the Neom project," according to ALQST. In October 2022, according to ALQST, the Specialized Criminal Court issued death sentences based on charges under the abusive 2017 counterterrorism law for resisting the forced evictions from the Saudi government to Ibrahim Saleh Ahmed al-Huwaiti, Ataullah Musa Muhammad al-Huwaiti, and Shadli Ahmed Mahmoud al-Huwaiti, the brother of Abdulrahim al-Huwaiti. Their sentences were upheld on January 23, 2023.

Human Rights Watch spoke with some members of the tribe in Jordan who said they were happy with compensation payments provided in exchange for their relocation. Information on the compensation packages varies. The Independent reported that families were offered $3,000 to relocate and that around one out of every 30 families accepted. Another report claimed that sums offered by the Saudi authorities were around 200,000 riyals (around $50,000), while the land's actual value was in the millions of riyals. In 2022, Bloomberg reported that, after Abdulrahim al-Huwaiti was killed, Saudi Arabia "expanded the compensation packages provided to removed residents, promising to grant them land elsewhere in the region." Residents said that officials might provide up to 1 million riyals ($266,000) for larger properties, but that owners of smaller homes might receive "just 100,000 riyals-less than the monthly salary of some NEOM employees."Bloomberg reported that a member of the tribe "resisted relocation at first. But after Al Huwaiti was killed and the authorities cut off the electricity and closed the schools, he realized he had no choice. He's waiting for his compensation payment. 'What can we do?' the man said, 'We want to live.'"

Forced Evictions and Demolitions in Jeddah

The Jeddah Central Project, another part of Mohammed bin Salman's Vision 2030 plan, aims to transform Jeddah's historic downtown neighborhoods into a luxury shopping and tourism district. It has been beset by allegations of forced evictions, mass demolitions, and widespread discrimination.

In December 2021, Mohammed bin Salman announced the Jeddah Central Project, an ambitious $20 billion project to develop 5.7 square kilometers of land to create "a world-class destination overlooking the Red Sea in the heart of Jeddah," featuring beach resorts and other luxury hotels with more than 2,700 rooms along with shopping centers, an opera house, and an oceanarium. The Jeddah Central Development Company, the company overseeing the project, is a wholly owned company of the PIF.

The neighborhoods selected for this development were previously vibrant working-class neighborhoods, housing a mix of middle and lower class Saudis, foreigners, and migrant workers. In public statements to media, Saudi authorities disparaged the neighborhoods as slums and a hotbed of drugs, lawlessness, and crime.

According to ALQST, "since the end of 2021 and early 2022, the Saudi authorities have evicted large numbers of people from their homes, in many cases without prior warning." Beginning in October 2021, before the project was officially announced by Saudi authorities, entire working-class neighborhoods were razed to the ground without consultation with local communities nor adequate warning from authorities, according to Amnesty International and DAWN. DAWN found that "between October 2021 and May 2022, Saudi authorities demolished between 16 and 20 neighborhoods across 4,000 square kilometers." Satellite imagery viewed by Amnesty International showed that at least 20 neighborhoods in the city were demolished by Saudi authorities between October 2021 and May 2022. A Jeddah Municipality document obtained by Amnesty International showed that the demolitions "affect more than 558,000 residents."

Significant Spending Without Transparency or Accountability

Reporting on PIF projects raise concerns about the lack of transparency and accountability for investment decisions that total billions of dollars. While some sovereign wealth funds are structurally separate and distinct from a government's chief executive, many sovereign wealth funds, like the PIF, operate with little transparency or apparent protections to regulate how government officials use the funds. The PIF is controlled by an abusive and unaccountable ruler, with the help of a small group of close advisors, who uses its assets to pursue his own interests rather than the public good.

The PIF Lacks Transparency and Accountability

The Peterson Institute for International Economics (PIIE) assesses SWFs across the globe on transparency, governance, and accountability metrics. In 2019, the PIIE scoreboard, which is based on publicly available information, gave the Public Investment Fund a score of 39 out of 100. The Saudi PIF was ranked 56 out of 64 funds analyzed, coming in right ahead of the Russian Direct Investment Fund. PIIE ranked Saudi Arabia's PIF as among the least transparent, least accountable, and with the least credible governance structures in the world.

Even international financial institutions have struggled to extract basic financial information from the PIF. The Wall Street Journal reported that in 2018, PIF executives rebuffed some of the IMF's requests for transparency around investments and debts at its state-owned companies. Ultimately "the PIF never shared all the information the IMF requested," according to the Journal.

Saudi Arabia's Freedom of Information Interim Regulations set the legal basis for the right to access public sector information in the country and outline the obligations of public entities. These regulations broadly resemble international freedom of information standards. Article 7.2 states that "individuals have the right to access information related to public entities activities to enhance integrity, transparency, and accountability" and that "any restrictions on requesting access or obtaining protected information received, produced, or managed by public entities must be justified in a clear and explicit manner."

However, the law does not designate a unified body to oversee the implementation of the regulations and public bodies are individually responsible for developing and implementing their own respective "policies and procedures related to the right to access or obtain public information." Some Saudi government agencies, like the Ministry of Justice and Ministry of Finance, do have detailed information on the rights of individuals to access the information of that respective agency and the process through which individuals can submit the "Public Information Request Form" to request information. The PIF, however, does not appear to have these procedures in place.

The scope of the regulations is also limited. Information considered protected may not be disclosed which includes "information that, if disclosed, may harm the Kingdom of Saudi Arabia's national security, policies, interests or rights." This exemption to access does fit within internationally recognized standards. However, recent court cases in Saudi Arabia demonstrate that the interpretation of what falls under a "national security" exemption is disproportionately wide. Protected and classified information may instead be subject to Saudi's Penal Law on Dissemination and Disclosure of Classified information and Documents.

For example, in November 2023, US consulting firms McKinsey, Boston Consulting Group, M Klein and Company, and Teneo were sued in Saudi Administrative Court in Riyadh by the PIF. The PIF sued the firms to prevent them from providing information to a US congressional probe headed by Senator Richard Blumenthal investigating Saudi influence in the United States via PIF investments. The probe is discussed in greater detail below.

The PIF argued in a Saudi court that the information requested by Blumenthal's probe was "classified as confidential" and that their disclosure "could harm the national security, interests, policies, or rights of the state." The PIF sought and was granted temporary injunctions against all four consulting firms, preventing the release of the requested records. According to Senator Blumenthal and the committee overseeing the investigation, the documents requested relate only to PIF's investments and commercial activities in the United States. Blumenthal argued strongly that the documents request related only to the PIF's commercial activities. The cases brought by the PIF in Riyadh Administrative Court remain pending at the time of writing.

In a hearing for the probe in February 2024, M Klein and Company's representative stated that the information requested by the committee is "information that I believe could be provided to the Committee or appropriate regulatory bodies prior to the finalization of the potential investment transaction that we have been engaged to help negotiate."

Article 5 of Saudi's Penal Law on Dissemination and Disclosure of Classified Information and Documents "states that disclosing classified information "shall be punished by imprisonment for a period not exceeding 20 years or a fine not exceeding one million riyals or both." Article 40 of Saudi's Basic Law of Governance states that the "the privacy of telegraphic and postal communications, and telephone and other means of communication, shall be inviolate." Both articles were used in the November case to prevent the release of information related to PIF's investment activities in the United States.

Wide interpretations of national security clauses by Saudi courts greatly limit the information that can be accessed or obtained according to the country's Freedom of Information Interim Regulations. As Human Rights Watch has found in prior investigations, Saudi criminal courts also have a long-documented history of applying an abusively wide interpretation of national security clauses which further hinders the ability of Saudi citizens to effectively exercise this right.

Moreover, the Saudi government, particularly under Mohammed bin Salman, regularly arbitrarily detains citizens for even mild criticism of the government. Saudi courts have sentenced individuals to decades-long prison terms, and in some cases, death, for peaceful online expression. It is therefore reasonable for Saudi citizens to fear similar repression if they were to submit a public information request via the official procedures that may possibly uncover financial mismanagement or corruption.

The PIF operates within a state lacking a rules-based or independent judiciary and there are no legal avenues for Saudi citizens to provide critical feedback to government officials or hold them accountable for failed policies, mismanagement, or corruption. The lack of basic freedoms and rights in Saudi Arabia, paired with the government's refusal to allow the existence of an independent civil society capable of monitoring and challenging government action, makes it impossible for Saudi citizens to seek information on or involvement in PIF decision-making, or to critique or seek accountability for abuses related to the PIF.

Giga-Projects, Poverty and Inequality

NEOM, a planned new city on the Red Sea announced by Crown Prince Mohammed in October 2017, is a particularly high-profile example of how the PIF's lack of transparency and independence enables the crown prince to direct enormous sums to particular projects without regard to the public good.

NEOM Company, established in January 2019, is wholly owned by the PIF and is tasked with developing a $500 billion economic zone. NEOM appears to be one of the Crown Prince's "highest priorities," media accounts have reported, and "the Saudi state is devoting immense resources to making it a reality." NEOM's CEO, Nadhmi Al-Nasr, was quoted as saying, "His Royal Highness has been with us, and I am not exaggerating, almost daily."

According to Bloomberg, a senior manager at NEOM was "so disturbed by what he saw as financial waste that it kept him up at night." Another told the news agency, "We couldn't even estimate the build cost. We were hanging buildings on the side of cliffs, and we didn't even know the geology." In response to questions about whether NEOM had engaged in financial waste, Nadhmi Al-Nasr, the CEO of NEOM, told Bloomberg that "we don't do it this way" and that NEOM evaluates employees based on their progress implementing plans, not how much they spend. Rather than improving the lives of Saudi citizens, NEOM had become "something of a full-employment guarantee for international architects, futurists, and even Hollywood production designers, each taking a cut of Saudi Arabia's petroleum riches in exchange for work that some strongly suspect will never be used," Bloomberg found.According to Bloomberg, "NEOM offered tax-free salaries of $700,000 to $900,000 for some senior expatriates - more than 20 times the income of the average Saudi - and a broad range of other perks."

The lack of any public accountability in Saudi Arabia reinforces the risk that NEOM's investments and spending would not benefit the public. In an interview with Bloomberg News, the crown prince said: "Imagine if you are the governor of New York without having any public demands. How much would you be able to create for the companies and the private sector?"

In June 2023, the Saudi Ministry of Sport announced that the PIF would take a controlling 75 percent share of the teams in the Saudi Pro League, which includes Al Ahli, Al Ittihad, Al Hilal and Al Nassr. Details of lucrative deals to lure high-profile footballers to the four teams soon emerged, including a two-year contract worth 400 million euros to Karim Benzema. The New York Times reported that "hundreds of millions of dollars would be made available to buy some of the game's biggest stars" and that $800 million had been reportedly set aside "to beef up the league's rosters."

The PIF's spending on such projects raises questions, particularly in light of the Saudi government's longstanding failure to disclose basic data on poverty levels. Saudi Arabia still does not nationally define poverty, nor has the government proposed a poverty line.

In 2017, the UN special rapporteur on extreme poverty and human rights went on mission to Saudi Arabia and noted "with concern the absence of reliable and systematic evidence of and statistics on poverty." Crown Prince Abdullah in 2005 prepared a National Poverty Reduction Strategy that was never made public. The special rapporteur found that "the failure ever to have published the Strategy is symptomatic of a determined lack of transparency that has characterized the Government's anti-poverty work since then." For decades, academics, policymakers and observers of Saudi Arabia have bemoaned the lack of reliable statistics, and the Saudi government has failed to demonstrate any progress on making available even the most basic poverty data. The special rapporteur also found in 2017 that "the various social assistance programmes managed by different ministries, public authorities and charities result in an inefficient, unsustainable, poorly coordinated social protection system that is unable to provide comprehensive assistance for those who are most in need."

In 2023, a UN Economic and Social Commission for Western Asian report on poverty in the Gulf Cooperation Council (GCC) - a political and economic unit including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates - estimated poverty lines (meaning income levels considered minimally sufficient to sustain a family) based on GCC national statistical offices on household income and consumption expenditure as no official information was available. The report found that Saudi Arabia has the highest poverty headcount rate for nationals in the GCC at 13.6 percent, thus nearly affecting nearly one in seven Saudi citizens. The actual poverty rate in the country is certainly much higher as this figure does not include all people in Saudi Arabia, particularly migrant workers, who make up approximately 42 percent of the population, and undocumented migrants - groups that are extremely economically marginalized and vulnerable to systematic labor abuses.

The report also found that expenditure distribution is more unequal in Saudi Arabia than in other GCC countries: the expenditure of the poorest 10 per cent of households in Saudi Arabia is 16 times lower than the expenditure of the richest 10 per cent. In the rest of the GCC, excluding Bahrain, the expenditure of the poorest 10 per cent households is only 4 to 7 times lower than that of the richest 10 per cent. Again, these inequality measures do not include the 42 percent of Saudi residents that are most economically marginalized. The report found that the GCC's "flourishing economies have led to the perception that their poverty rates were low or non-existent and hence little effort went into investigating the prevalence and depth of poverty."

The Saudi government has an international obligation to dedicate the maximum available resources towards the progressive realization of economic, social, and cultural rights. These preliminary poverty figures suggest what could be troublingly high rates of poverty and inequality inside Saudi Arabia, suggesting that the country is spending large amounts of its resources on vanity projects and failing in its duty to use the maximum of available resources to realize economic and social rights. These concerns are further exacerbated when considering the PIF's lack of transparency and accountability: there are no mechanisms through which the Saudi public can pressure the government to dedicate further resources to poverty alleviation and provide essential services to the most marginalized.

The PIF is Used to Whitewash Abuses by Saudi Arabia

While the PIF plays a role in diversifying the Saudi economy and has made investment decisions that can be linked to a profit motive, the PIF also uses its assets to increase foreign support for Saudi Arabia, spread disinformation about the country's rights record, neutralize scrutiny, silence critics, and undermine institutions seeking transparency and accountability.

Under the guise of everyday commerce, PIF investments help whitewash, in some of the world's most politically strategic jurisdictions, Saudi Arabia's record of human rights violations. PIF investments in foreign jurisdictions help build support for Saudi Arabia despite its record of human rights abuses. At best, these efforts have resulted in institutions and officials failing to acknowledge or speak out about the country's dire human rights record; at worst, some officials have ultimately actively promoted falsehoods about Saudi reforms and undermined foreign oversight bodies seeking transparency and accountability.

Saudi authorities have made contradictory claims about the relationship between the PIF and the Saudi government. Court documents analyzed below show how the PIF has claimed that its investments abroad concern Saudi Arabia's national security interests and fall under sovereign immunity when investments are being scrutinized. Yet, when politically expedient, the PIF has also argued that its investments are based solely on economic goals and are separate from the Saudi government.

Investments that Would Effectively Mute Criticism of Saudi Arabia

In June 2023, the PGA Tour, a US non-profit organization, announced an agreement combining PIF's golf-related commercial businesses and rights, including LIV Golf, with the PGA Tour. The framework agreement between the PGA Tour and LIV Golf includes a "non-disparagement clause," stating that each party agrees that "it will not at any time, directly or indirectly, make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments, or statements concerning the other Party their affiliates and ultimate beneficial owners or their respective businesses, directors, employees, officers, shareholders, members or advisors." Before the June 2023 framework agreement, PGA Tour officials had previously expressed misgivings about LIV Golf at least in part due to concerns over Saudi's human rights record. The PGA Tour and LIV Golf had not reached a final agreement as of late August 2024. During a press conference in August 2024, PGA Tour commissioner Jay Monahan said that the deadline for negotiations was "extended" beyond December 31, 2023, the date originally set for reaching an agreement.

The PGA-LIV framework agreement is not the only high-profile sports contract that may limit criticism of the Saudi government. A New York Times investigation revealed that Lionel Messi's contract with Saudi Arabia's tourism authority contains a condition barring the footballer from saying anything that might "tarnish" the reputation of Saudi Arabia. The contract also awarded him "$2 million to promote Saudi Arabia on his social media accounts 10 times a year," according to the New York Times.

In other cases, the conclusion or announcement of investments or other business arrangements appears to have limited criticism of Saudi Arabia and Mohammed bin Salman. For instance, an investigation by The Intercept found that the media company Vice "uploaded but then quickly removed" a documentary critical of the crown prince in June 2023, six months after it entered into a partnership deal with the MBC Group, a media company controlled by the Saudi government but not affiliated with the PIF. According to The Intercept, the film was uploaded to YouTube on June 19, 2023, but then was set to private after four days. The film, titled "Inside Saudi Crown Prince's Ruthless Quest for Power," reportedly covers the Ritz Carlton detention in Riyadh. Sources at Vice told the Guardian that the film was removed after senior staff intervened, claiming that it posed a safety risk to Saudi-based staff. The Guardian also reported that "Vice has repeatedly blocked news stories that could offend the Saudi government, leaving its reporters unsure if they are still able to report freely on the kingdom's human rights abuses" after the company signed the partnership with MBC. A Vice spokesperson declined to comment to the Guardian.

Senator Richard Blumenthal, chair of the Senate Permanent Subcommittee on Investigations, opened a probe into the PGA-LIV Golf agreement that expanded to examine more broadly the risks of growing PIF investments in the United States. Human Rights Watch was invited to appear at a September 2023 hearing of the investigation to provide testimony. At the time of publication, there are no further hearings scheduled for the investigation and the final report for the probe remains forthcoming.

During a September 2023 hearing of the probe, Ben Freeman, a director at the Quincy Institute for Responsible Statecraft, testified that it would be "naïve to believe that the PIF's actions related to the PGA Tour are not part of the Kingdom's much larger lobbying, public relations, and broader influence operation." Senator Blumenthal himself also asserted in his opening remarks during a February 2024 hearing that Saudi Arabia has used "instruments of commerce in the United States to increase its influence within our shores."

PIF Has Undermined Accountability Efforts Abroad

The PIF has also effectively undermined transparency and accountability mechanisms abroad, including by invoking sovereign immunity. In June 2023, Senator Richard Blumenthal announced the probe into the PGA-LIV Golf framework agreement. In letters to both the PGA Tour and LIV Golf, Blumenthal noted Saudi Arabia's "deeply disturbing human rights record at home and abroad" and its stated intention to "use investments in sports to further the Saudi government's strategic objectives."

Senator Blumenthal's probe into Saudi investments in the United States repeatedly requested representatives from the PIF to appear at the Permanent Subcommittee on Investigations and provide testimony to Congress. As of the time of writing, PIF representatives have refused these requests, and none of them has testified at the committee despite a subpoena issued in September 2023. The PIF also prevented four US-headquartered consultancy firms from responding and fully complying with subpoenas issued by the committee.

In June 2023, the committee sent a letter to PIF Governor Yasir al-Rumayyan requesting him to appear in person to testify at a July 2023 hearing for the probe. PIF's counsel on behalf of al-Rumayyan informed the committee that he was unavailable to testify at the hearing due to "scheduling conflicts" but was looking forward to "assisting the committee's efforts." On July 27, Senator Blumenthal sent another letter to al-Rumayyan, renewing the committee's request for his in-person testimony on a mutually acceptable date in September 2023.According to the committee, the PIF's counsel wrote in a letter on August 4 that al-Rumayyan was "an inappropriate witness" because he is "a minister bound by the Kingdom's laws regarding the confidentiality of certain information."

PIF's counsel wrote that the committee's investigation raises legal considerations including "consideration of and solicitude for the principles of sovereignty and international comity." In response, the committee argued that the suggestion that al-Rumayyan's government roles shield him "from testifying about PIF's commercial activities is both deeply troubling and unsupported as a legal matter" and that the testimony and records sought by the committee concern the "PIF's current and planned commercial activity in the United States, falling under the well-defined commercial exemption to sovereign immunity and raising little concern about international comity or confidentiality."

In September 2023, Chairman Blumenthal issued a subpoena to the PIF's "wholly owned United States subsidiary, USSA International LLC, for documents related to PIF's takeover of American golf and related investments throughout the United States" because the PIF and its governor, Yasir al-Rumayyan, repeatedly declined to voluntarily cooperate with the investigation. The PIF has failed to comply with this subpoena at the time of writing.

The subcommittee also requested four US headquartered consultancy firms - Boston Consulting Group, McKinsey, M Klein and Company, and Teneo - to provide testimony and documents to the investigation. After voluntary requests to appear were rebuffed, the subcommittee issued subpoenas to the firms in November 2023. In response, the PIF sued all four consultancies in Saudi Administrative Court in Riyadh, claiming that the records sought by the subcommittee were "classified as confidential" and could therefore "harm the national security, interests, policies, or rights of Saudi Arabia" and pose "an imminent threat to the Kingdom's sovereignty." The temporary injunction sought by the PIF, which was granted by the Saudi court, invoked article 5 of Saudi's Penal Law on Dissemination and Disclosure of Classified Information and Documents, which "states that disclosing classified information "shall be punished by imprisonment for a period not exceeding 20 years or a fine not exceeding one million riyals or both."

On August 14, 2024 Human Rights Watch sent letters to Boston Consulting Group, M. Klein and Company, McKinsey & Company Inc., and Teneo outlining the general conclusions of our research.

On September 4, McKinsey replied to Human Rights Watch stating the following: "We respect the authority of the Permanent Subcommittee on Investigations ("the Subcommittee") and have worked extensively to comply with its subpoena.Shortly after receiving the Subcommittee's subpoena, a Saudi court issued an injunction prohibiting McKinsey from disclosing materials relating to our work for PIF.This has put McKinsey in a difficult position, and we have opposed the injunction and appealed its issuance."

Also on September 4, Teneo replied to Human Rights Watch stating that "Teneo has been firmly committed to cooperating with the U.S. Senate Permanent Subcommittee on Investigations (the "Subcommittee") from the start, and we have devoted extensive resources to identify and provide materials responsive to the Subcommittee's subpoena we received last year. We will continue to work cooperatively and in good faith with the Subcommittee."

The Permanent Subcommittee on Investigations (PSI) is the only standing committee of US Congress that has the authority to issue subpoenas as part of its investigations. Created in 1948, the PSI has a broad mandate and has conducted investigations into corruption, money laundering, consumer protection issues, and abuse in government programs, among other issues. Despite these decades of investigations into topics of public concern, Chairman Blumenthal noted during a February 2024 hearing that the subcommittee has "never, ever conceded to a blanket-sweeping claim of foreign sovereign immunity over commercial documents" and that the PIF's repeated attempts to obstruct the investigation were "unprecedented."

In 2022 and 2023, prior to the announcement of the framework agreement, the PIF and Yasir al-Rumayyan also refused to produce documents and declined to appear for depositions in relation to legal action between the PGA Tour and LIV Golf, arguing that no court in the US had jurisdiction over them on the basis of sovereign immunity. In February 2023, a federal magistrate judge court rejected this argument, finding that the "PIF's conduct falls within the commercial activity exception to the Foreign Sovereign Immunity Act." According to the court, "typical investor activities" could not be reasonably considered confidential information that would adversely affect Saudi Arabia, and that any sovereign considerations were diminished by "PIF's intent 'to benefit from the United States market.'"

In the US, there are few mechanisms through which to review PIF investments or investments from other sovereign wealth funds. PIF investments do not now trigger a review by the Committee on Foreign Investment in the United States (CFIUS), a US committee that reviews foreign investments which may pose threats to national security. The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which "strengthens and modernizes CFIUS", did not include human rights concerns as part of the CFIUS review process.

PIF Efforts to Create the False Impression That It Is Not a Saudi Government Actor

At other times, the PIF has used its significant resources to try to create a false distinction between the PIF and Saudi government. Soon after the killing of Jamal Khashoggi, the PIF hired public relations firms in New York to publicly distance itself from the Saudi government. According to filings with the US Department of Justice, the PIF signed a $120,000-a-month contract on February 16, 2019, with New York firm Karv Communications to enhance the PIF's image and create a "clear distinction" between the PIF and the kingdom's political leadership. Karv was tasked to "enhance the reputation and image" of the PIF and its senior executives, while "underscoring the business-only purpose and focus" of the fund. A spokesperson for the PIF told the Financial Times that Karv provided "strategic communications counsel to ensure global stakeholders, and particularly the US business community, understand the fund's clearly defined long-term investment strategy and governance frameworks as PIF continues to develop its domestic and international portfolio." In response to questions sent by Human Rights Watch, Andrew Frank said that "KARV Communications worked with the Saudi Arabian Public Investment Fund (PIF) from January 2019 - June 2021" and that the company's "filings are documented and show our outreach to media and other third parties."

The PIF has also invested significantly in Russia. In 2015, the PIF formed an investment partnership with the Russian sovereign wealth fund, the Russia Direct Investment Fund (RDIF). The "long-term strategic partnership" would invest primarily in projects on Russian territory. In September 2017, according to the PIF, "as part of Russian-Saudi negotiations during the visit to Russia of HRH Prince Mohammed bin Salman Al-Saud, Deputy Crown Prince, and Chairman of the Council of Economic and Development Affairs (CEDA) and of the Public Investment Fund," the RDIF and PIF signed a memorandum of understanding to explore opportunities to enhance cooperation, including by the PIF joining the consortium of investors developing the former Tushino airport in Moscow. A month later, in October 2017, the RDIF declared that it would invest several billion dollars into NEOM and take part in the building of NEOM with Russian high-tech companies. In November 2017, the Russian energy minister said the two sovereign wealth funds were considering investments in more than 20 projects in real estate, infrastructure, agriculture, oil and gas worth more than $10 billion. In 2021, Arab News quoted the RDIF's CEO saying that the RDIF would continue its "strategic partnership in many areas" with the PIF, including by investing in Saudi's green initiatives.

In 2022, the US imposed sanctions on RDIF. The US Department of Treasury's Office of Foreign Assets Control (OFAC) said that US sanctions on RDIF were imposed to restrict Russia's ability to "use assets to finance" violations of international law, in response to Russia's invasion of Ukraine. According to OFAC, the decision stemmed from the recognition that "RDIF is widely considered a slush fund for President Vladimir Putin and is emblematic of Russia's broader kleptocracy." OFAC issued the RDIF sanctions pursuant to Executive Order 14024, which authorizes sanctions against Russia for its harmful foreign activities.

A Vehicle for Whitewashing and Sportswashing

Over the last several years, the Saudi government has used various tactics in an attempt at image rehabilitation to deflect from global perception of the Saudi state as a severe and persistent human rights violator, particularly during the tenure of Crown Prince Mohammed Bin Salman.

Human Rights Watch has reported on the government's billion-dollar campaign to host entertainment, cultural, and sporting events to gain public favor, including by hosting a range of media celebrities, golf tournaments, boxing and wrestling matches, and the Formula 1 Grand Prix. The Saudi government appears to have recognized that hosting global celebrities and hosting major entertainment and sporting events and companies is a powerful means to launder its reputation and convince international investors to invest in the country despite pervasive human rights violations. "Sportswashing" works by laundering a government's reputation through hosting major sport events which attract widespread, positive media attention, while diverting it away from the host's abuses.

The PIF is a central component of Vision 2030, which explicitly lays out the role of sports in enhancing the image of Saudi Arabia abroad. One of the 13 programs developed to help realize Vision 2030 lists multiple leisure and recreational initiatives, in part aimed at creating a "positive image of the kingdom internationally." The delivery plan also references "enhancing the image of Saudi Arabia through the use of sports diplomacy." Saudi Arabia has bid for, hosted and sponsored some of the world's major sporting events such as World Wrestling Entertainment (WWE) events, the Saudi Arabian F1 Grand Prix, the 2023 FIFA Club World Cup, the Next Gen ATP Tennis Tournament Finals 2024-2027, the 2029 Asian Winter Games, the 2034 Asian Games, and the 2034 FIFA Men's Football World Cup.

Beginning in January 2020, the PIF began attempting to purchase the English Premier League football club Newcastle United F.C. At first, the bid stalled and was rejected by the Premier League. Human Rights Watch called on the Premier League to take human rights into consideration as it evaluated the sale and to adopt a comprehensive human rights. But, in 2021, the PIF entered into a deal to purchase Newcastle United for £300 million (approximately US$387 million). The Premier League's approval of the sale of Newcastle United to a business consortium led by the PIF was conducted in an opaque manner and without any human rights policy in place. The PIF now owns 80 percent of the English soccer club. Human Rights Watch and other human rights organizations had called on the Premier League to reconsider the approval of the Newcastle United sale.

The October 2021 Premier League statement announcing the sale said that the league had "received legally binding assurances that the Kingdom of Saudi Arabia will not control Newcastle United Football Club." The league did not disclose what these assurances were, nor explain how they would be legally binding. Instead, the Premier League appears to have acquiesced to the note that the PIF is separate from the Saudi state, even though the PIF is observably and clearly a Saudi state organ, its chairman is the de facto Saudi ruler Crown Prince Mohammed bin Salman, its board members are nearly all currently serving ministers and other high-level officials, and it is a sovereign wealth fund that reports to the government's Council of Economic and Development Affairs.

Human Rights Watch wrote to the Premier League CEO, Richard Masters in March 2022 to express concerns over the Newcastle United decision and to raise concerns about the involvement of Saudi Arabia's Public Investment Fund in facilitating human rights abuses. Masters responded on behalf of the Premier League in March 2022 stating that "the Premier League received legally binding assurances that the Kingdom of Saudi Arabia ('KSA') will not control Newcastle United Football Club." Human Rights Watch also wrote to the Premier League in June 2020, outlining serious abuses by Saudi authorities after Mohammed bin Salman ousted his rival, Mohammed bin Nayef, in 2017.

Premier League's handbook does not include human rights under its "owners and directors test," even though ownership of prominent football clubs by state entities or individuals close to state leaders is on the rise throughout Europe. This gap has allowed Saudi Arabia to employ its "sportswashing" strategy in the Premier League. Human Rights Watch has repeatedly called on the English Premier League to adopt and implement human rights policies that would prohibit governments implicated in grave human rights abuses from securing stakes in Premier League clubs to whitewash their reputations, as well as state entities that they control.

As of January 2023, the PIF owned a reported 93 percent controlling share in LIV Golf, raising serious concerns about the role the league may be playing to burnish Saudi Arabia's image to "sportswash" ongoing abuses committed by Saudi authorities. Human Rights Watch wrote to LIV Golf in August 2022, urging the league to develop a strategy to mitigate the risk of laundering the reputation of the Saudi government. LIV Golf did not respond to HRW's letter, nor indicate that they sought to develop such a strategy.

On June 6, 2023, the PGA Tour announced an agreement combining PIF's golf-related commercial businesses and rights, including LIV Golf, with the PGA Tour and DP World Tour into "a new, collectively owned, for-profit entity." The merger would place the Saudi government in an unprecedented position of ownership, influence, and control over an entire professional sports league, and might effectively enable the Saudi government to sportswash its egregious human rights record. At the time of publication, a final agreement between LIV Golf and the PGA Tour had not been reached. According to Bloomberg, PIF representatives met with PGA Tour officials in September 2024 but progress towards a deal "has been slow."

Human Rights Watch has urged the PGA Tour's Policy Board to adopt a clear human rights policy and develop a strategy to mitigate the risk of laundering the reputation of the Saudi government and the Crown Prince. As of November 2024, Human Rights Watch has not received a response from the PGA Tour Policy Board, nor are there indications that the Tour has sought to develop a human rights strategy.

In October 2023, FIFA confirmed that Saudi Arabia was the sole bidder for the 2034 men's World Cup, one of several initiatives that signal a coming decade of Saudi sportswashing. In other such developments, Saudi Arabia hosted the men's finals for 21 and under players in December 2023. In February 2024, the men's Association of Tennis Professionals (ATP) and the PIF announced a "multi-year strategic partnership." And the Women's Tennis Association (WTA) announced in April 2024 that its next three finals, from 2024 to 2026, will be hosted in Riyadh following an agreement with the Saudi Tennis Federation.

The hosting of the men's World Cup raises particular concerns. FIFA's bidding documents show that significant construction build is required to host the 48-team tournament in Saudi Arabia, including at least ten new stadiums, hotels, transit and other mandatory infrastructure. On January 15, 2024, Qiddiya Investment Company (QIC), a company wholly owned by the PIF, revealed the design for the new Prince Mohammed bin Salman Stadium, a high-tech World Cup venue. On February 1, 2023, the Saudi Arabian Football Federation announced plans to build three new stadiums in Riyadh, Qiddiya, and Dammam, and the renovation of four existing stadiums and the expansion of three others. The country bars labor unions, strikes and protests, and there are few human rights protections for Saudi Arabia's estimated 13.4 million migrant workers who labor in construction or other low-wage service sector jobs.

Greenwashing

Another recent major effort of Saudi investment through the PIF has been to highlight high profile investments in clean energy technologies. However, the PIF's investments in clean energy remain a miniscule proportion of those in fossil fuels and thus amount to little more than greenwashing. While claiming that money from fossil fuel exports would be used to increase investments in renewables at home, in 2021, renewables supplied just 0.3 percent of the nation's total power generation. At the same time the PIF has made limited investment in clean energy it has acquired significant new assets in fossil fuels. The PIF has also served as a tool of distraction from Saudi Arabia's growing contributions to the climate crisis and its role leading efforts to undermine and stymy international agreements and other efforts to address the climate crisis.

The PIF's investments in clean technology lag far behind its continued investment in fossil fuels. The PIF is built on oil wealth and remains a major investor in fossil fuels. In February 2022, the PIF acquired an $80 billion stake in Saudi Aramco. Aramco announced in 2021 its plans to increase crude oil production from 12 million barrels a day to 13 million barrels a day by 2027, a move which Al Jazeera reported "scientists, energy experts, and activists say goes directly against what is needed to stave off the most catastrophic effects of climate change." The PIF is also a major investor in fossil fuels outside of Saudi Arabia. According to an Atlantic Council report, petrochemicals still make up 39 percent of the PIF's investments in Saudi and regional companies, the plurality of the PIF's investments. In May 2020, the PIF acquired $2 billion in big oil stocks, including an $827.7 million investment in the British oil company BP. This followed a $1 billion investment in four major European oil companies in April 2020.

The PIF's continued investment in fossil fuels and financing of further extraction is at odds with Saudi Arabia's climate commitments. Saudi Arabia has specific obligations to protect human rights from environmental harm including by taking concrete steps to fulfill and increase its commitments to reduce greenhouse gas emissions under the 2015 Paris Agreement on Climate Change. In 2021, Saudi Arabia updated its Paris Agreement emissions pledge, committing to reduce emissions by 278 million tons by 2030, but it provided no baseline on which to evaluate this pledge. The Climate Action Tracker found that the reduction target was "critically insufficient" when compared with Saudi Arabia's "fair-share contribution to climate action" and that the pledge was "consistent with more than 4°C of warming," which would have catastrophic impacts on the earth.

The PIF's green investments come alongside reports that the Saudi government was lobbying to remove language from an Intergovernmental Panel on Climate Change report on the effects of climate change that called for the phase out of fossil fuels and the "need for urgent and accelerated mitigation actions at all scales." Saudi officials consistently oppose language in international efforts on climate calling for "transformation" or stating that the "focus of decarbonisation efforts in the energy systems sector needs to be rapidly shifting to zero-carbon sources and actively phasing out all fossil fuels."

In June 2023, a group of UN experts wrote to Saudi Aramco expressing concern over the company's business activities, including its funding from the PIF, claiming that these activities "appear to be contrary to the goals, obligations, and commitments under the Paris Agreement on climate change and which are adversity impacting the promotion and protection of human rights in the context of climate change." The letter pointed to Aramco's plans to expand crude oil production, as well as its plans to explore further oil and gas reserves to increase production capacity. The experts wrote that "Saudi Aramco's refusal to reduce its production of oil and gas - and continued exploration for more oil and gas - contributes to the risk of overshoot of the 1.5°C carbon budget, with resultant significantly worsened climate change-related human rights impacts."

Additionally, the experts raised concerns over Aramco's alleged misrepresentation and withholding of key information. They pointed to allegations that Aramco "presents misleading information, including the premise that sustainability is a core concern of its business strategy, through widespread marketing and advertising." They found that "employing a marketing strategy which misrepresents Saudi Aramco's overall emissions and the carbon intensity of its crude oil production, which is often referred to as 'greenwashing,' can be harmful to human rights." The experts noted that, as Aramco has recently turned towards private financial support, "the businesses that have helped finance Saudi Aramco's activities are contributing to climate change-related human rights impacts, contrary to their own human rights responsibilities." The UN experts name the PIF as one of these financial institutions.

For decades, Saudi Arabia played a key role obstructing progress on global climate negotiations both through its own actions and as a leader which other nations obediently follow. In December 2023, Saudi Arabia was the biggest obstacle to an agreement at the COP28 climate summit in the UAE by strongly opposing any language that would explicitly mention fossil fuels. Saudi also objected to a provision aimed at "tripling global renewable energy capacity by 2030."

International Human Rights Standards

The Saudi Government's Human Rights Obligations

The PIF is an organ of the Saudi state. It was created by royal decree to administer state assets. It is overseen by the Council of Economic and Development Affairs (CEDA), a government body that oversees the Kingdom's domestic affairs. Its board is appointed by Mohammed bin Salman in his capacity as prime minister, and he also chairs the board.

As such, the PIF has an obligation to uphold Saudi Arabia's international human rights commitments. Saudi Arabia has ratified the Convention Against Torture and Other Cruel Inhuman or Degrading Treatment or Punishment, the Convention on the Rights of the Child, the International Convention on the Elimination of All Forms of Racial Discrimination, and the Convention on the Elimination of All Forms of Discrimination Against Women. While Saudi Arabia has not ratified the International Covenant on Civil and Political Rights nor the International Covenant on Economic, Social and Cultural Rights, many of the provisions of these two core covenants reflect norms of customary international law. Saudi Arabia has also joined the Arab Charter on Human Rights.

The Prohibition on Arbitrary Detention

Saudi authorities held detainees in unofficial places of detention, including at Riyadh's Ritz-Carlton hotel between November 2017 and February 2018, without trial or charge for over 16 months and without a clear legal basis. In January 2018, a spokesperson from Marriott, which owns the Ritz-Carlton brand, said, "The hotel is operating under the directive of local authorities and not as a traditional hotel for the time being."

The prohibition of arbitrary detention is recognized in numerous international and regional human rights treaties, including the Arab Charter on Human Rights, and is a norm of customary international law. Similarly, article 36 of Saudi Arabia's Basic Law of Governance states that "no one may be confined, arrested or imprisoned without reference to the law."

The United Nations Working Group on Arbitrary Detention considers detention to be arbitrary when the detaining authority fails to observe, wholly or in part, the norms related to the right to due process, including for a prompt hearing before a judge following the initial detention.

Unofficial places of detention do not have the safeguards international standards call for, including a prison file management system, regular inspections, and appropriate staffing, training, and supervision. Their use raises substantial risks of arbitrary detention, torture and other ill-treatment, and violation of fair trial rights. For these reasons, the United Nations Human Rights Committee, in its general comment on article 7 of the International Covenant on Civil and Political Rights (ICCPR), has recommended that "provisions should be made for detainees to be held in places officially recognized as places of detention and for their names and places of detention, as well as for the names of persons responsible for their detention, to be kept in registers readily available and accessible to those concerned, including relatives and friends."

The Absolute Ban on Torture

Torture is prohibited in all circumstances and at all times. The Arab Charter on Human Rights states that States should "protect every person in their territory from physical or psychological torture, or from cruel, inhuman, degrading treatment," and "take effective measures to prevent such acts." The Convention Against Torture explicitly prohibits using any statement obtained through torture as evidence in proceedings, other than against the person accused of torture.

Government Spending and Human Rights

States have international obligations to respect, protect, and fulfill human rights, including by making reasonably necessary resources available for this purpose. Evaluating how a government chooses to spend the resources at its disposal is essential for evaluating a government's efforts to realize its human rights obligations.

People have a right of access to information and to participate in public affairs, including in relation to government budgeting. As the UN human rights office (OHCHR) and International Budget Partnership explained in a joint report in 2017, there is a "close relationship between governments' budgets and human rights," a close relationship that has been "increasingly… recognized" by UN human rights bodies, the Committee on Economic, Social and Cultural Rights, the Committee on the Rights of the Child, and special rapporteurs. The relationship of human rights to the budget process is "relatively straightforward," including the right to participate in the conduct of public affairs, the right of access to information, and "the principle of accountability, whereby governments are accountable to their people for their actions in realizing human rights."

The OHCHR and the International Budget Partnership have raised specific concerns regarding the implications of "off-budget spending," including through "income pools from domestic natural resource extraction" for governments seeking to fulfill their human rights obligations. An increasing number of governments have created off-budget sovereign wealth funds (SWFs) such as the PIF, in which they deposit government revenue, trade surpluses, and revenue from natural resources like oil and gas. Many of these SWFs control significant and increasing amounts of wealth, some of which the SWFs invest domestically, for example in development projects, as well as abroad. SWFs typically characterize the purpose of their investments as increasing the value of the fund over time to the benefit of people living in the national territory.

SWFs often suffer from significant transparency, governance, and accountability gaps. The OHCHR and the International Budget Partnership noted, "When spending is happening outside of the budget process, often in a manner that is not transparent, the government's capacity to monitor and control spending can be significantly impeded." There are significant challenges in determining "what is being spent and on what," and in ensuring "that government spending from the different sources, when taken together, is consistent with the government's human rights obligations."

There is no internationally agreed upon definition of corruption. Transparency International, which is a global movement working in over 100 countries against corruption, defines corruption as "the abuse of entrusted power for private gain," noting that corruption "erodes trust, weakens democracy, hampers economic development and further exacerbates inequality, poverty, social division and the environmental crisis."

Corruption that impacts a state's ability to progressively realize rights can give rise to a violation of its obligations to respect, protect and fulfil those rights. The Committee on Economic Social and Cultural Rights, for instance, has made clear that states must use "the maximum of available resources" to realize economic, social, and cultural rights. The failure to curb corruption means that states are not making maximum use of their available resources to realize rights. The same is true of the failure to prevent and address government expenditure that is wasteful, for example paying more than needed for goods and services or spending not based on sound evidence.

In 2017, after a visit to Saudi Arabia, the UN special rapporteur on extreme poverty and human rights concluded that Saudi Arabia's approach to eradicating poverty was "inefficient, unsustainable, poorly coordinated and, above all, unsuccessful in providing comprehensive social protection to those most in need." According to the UN expert, there were "four major areas in which the Government needs to undertake sustained reform if it is to meet its Vision 2030 goals, while eliminating poverty, ensuring social protection, and promoting respect for human rights." These included evidence-based decision-making and public participation in strategies aimed at meeting people's economic rights.

Businesses' Human Rights Responsibilities

While governments have the primary duty to respect, protect and fulfill human rights under international law, businesses also have internationally recognized responsibilities regarding human rights, including a responsibility to avoid causing or contributing to human rights abuses.

The UN Guiding Principles on Business and Human Rights, which the UN Human Rights Council endorsed in 2011, are widely accepted as a legitimate articulation of businesses' human rights responsibilities. They have been supplemented by a variety of interpretive guides and statements from the Office of the High Commissioner for Human Rights (OHCHR). Businesses, including sports federations such as FIFA, Formula One, the PGA Tour, and the Women's Tennis Association, are all covered entities under the Guiding Principles and have a responsibility to respect human rights throughout all their operations. In line with these principles, sports federations should adopt specific policies and conduct due diligence to identify any risks of contributing to human rights harms.

Adverse Human Rights Impacts Directly Linked to a Business Through its Business Relationships

Under the Guiding Principles, companies have a responsibility to "avoid causing or contributing to adverse human rights impacts through their own activities," as well as to "seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts."

According to the Guiding Principles, businesses are responsible for human rights abuses both when the business is directly involved in the abuse and when involved in the abuse through their business relationships. Business relationships are "understood to include relationships with business partners, entities in [the business'] value chain, and any other non-State or State entity directly linked to [business'] operations, products or services." The commentary to the Guiding Principles indicates that "questions of complicity may arise when a business enterprise contributes to, or is seen as contributing to, adverse human rights impacts caused by other parties."

The concept of "business relationship" includes relationships between a co-investor and a sovereign wealth fund with which it is involved in joint investment ventures, the relationship between a business and a sovereign wealth fund that has invested in the business, and the relationship between a private business regulator and a sovereign wealth fund with which it is involved in the context of the exercise of its regulatory power (including where a sovereign wealth fund is seeking to invest in a business under its authority). Businesses are responsible for mitigating adverse human rights impacts that are linked to any of these types of business relationships.

Businesses' Responsibilities to Conduct Human Rights Due Diligence

The Guiding Principles specify that businesses should exercise human rights due diligence to identify human rights risks associated with their operations, take effective steps to prevent or mitigate those risks, and ensure that the victims of any abuses have access to remedies.

Human rights due diligence should include, among other things, "adverse human rights impacts that the business enterprise…may be directly linked to its operations, products or services by its business relationships." Businesses' human rights due diligence processes should include the risk of complicity in laundering the reputations of governments, businesses, or individuals responsible for ongoing or recent serious human rights abuses. A credible due diligence process would identify if the entity in which the business is entering a relationship has engaged in abusive activity, evaluate the risk of the business relationship laundering abuses, and develop a strategy to mitigate that risk.

Bolstering reputation is big business. Public relations firms explicitly sell the promise of a better reputation, but many other business relationships, especially those involving prominent entertainers, athletes, politicians and companies, also offer valuable reputational benefits. While soft power to shape perceptions of government policies can be used for beneficial purposes, such as to boost tourism or local products, when leaders turn to image-laundering to whitewash poor human rights records, it can deflect efforts to hold them accountable for these abuses. Reputation-laundering process can take many forms, including cases in which a business relationship involves or creates significant risk of covering up, justifying, or denying specific human rights violations or undermining efforts for accountability. If a business relationship is part of a deliberate effort to distract from specific rights abuses, it may be considered reputation laundering.

In keeping with their human rights responsibilities under the UN guidelines, businesses should not deliberately enter into a business relationship whose sole or primary purpose is to deny or cover up human rights violations. When a business relationship predominantly serves another purpose, but there is a significant risk of such reputation-laundering as a result of the relationship, the business should seek to mitigate this impact. This could be done by speaking out about those abuses that the business relationship risks helping obscure.

Businesses should also refrain from activities that would bolster the reputation of government entities or officials recently and credibly accused of serious abuses. Finally, businesses should not agree to any explicit or implicit contractual terms that restrict their ability to speak out in public or in private about such abuses, as distinct from standard confidentiality requirements.

Businesses may "identify general areas where the risk of adverse human rights impacts is most significant, whether due to certain suppliers' or clients' operating context, the particular operations, products or services involved, or other relevant considerations, and prioritize these for human rights due diligence." Given the significant risks involved, businesses should, at a bare minimum, prioritize human rights due diligence before engaging with a sovereign wealth fund linked to an abusive government. These requirements arise both prior to the establishment of a new business relationship and throughout the course of an existing business relationship.

The first step for a business enterprise is to "identify and assess the nature of the actual and potential adverse human rights impacts with which [it] may be involved." This implies identifying the potential risks related to a given business relationship, the various individuals and collectivities that may be affected, the relevant human rights standards at play, and the exact impact of a given business relationship on those identified. This step should be repeated at regular intervals throughout an existing business relationship, as human rights situations are dynamic. The findings of this identification and assessment process must then be incorporated in the business's approach.

The Guiding Principles provide that businesses report formally on human rights due diligence measures as a matter of transparency and accountability. Reporting should be "of a form and frequency that reflect an enterprise's human rights impacts and that are accessible to its intended audiences," and provide "information that is sufficient to evaluate the adequacy of an enterprise's response to the particular human rights impact involved."

Acknowledgements

This report was researched and written by Joey Shea, Saudi Arabia researcher in the Middle East and North Africa division at Human Rights Watch and Kristine Beckerle, former senior researcher in the Middle East and North Africa division.

This report was reviewed and edited by Michael Page, Middle East and North Africa deputy director. The report was also reviewed by a Middle East and North Africa Division researcher; Leila Saad, Gulf research assistant in the Middle East and North Africa division; and Adam Coogle, Middle East and North Africa deputy director. It was also reviewed by Arvind Ganesan, economic justice and rights director; Sarah Saadoun, poverty and inequality senior researcher and advocate; Sylvain Aubry, poverty and inequality deputy director; Minky Worden, director of global initiatives; Nicole Widdersheim, deputy Washington director; Sarah Yager, Washington director; Antonia Juhasz, former senior fossil fuels researcher; Amanda Alampi, campaigns and public engagement director. An officer in the Middle East and North Africa Division provided research, editing, and production assistance.

Michael Bochenek, senior legal advisor, and Tom Porteous, deputy program director, provided legal and program reviews. Production assistance was provided by Travis Carr, publications officer.

We are grateful to the Lowenstein International Human Rights Clinic members at Yale Law School who drafted a research memo which provided an early foundation for this report.

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